Class B LEED Office Buildings Offer Noteworthy Opportunities
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December 4, 2023 2 Minute Read
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Most U.S. markets have a sizeable enough inventory of LEED*-certified office buildings to draw meaningful performance comparisons with non-certified buildings.
We chose to analyze the Downtown Boston market where just over one in three Class A buildings and one in 10 Class B** buildings have been certified.
Our analysis demonstrates that LEED certification provides greater relative performance benefits for Class B buildings than for Class A assets. Class B LEED properties have an average 180-basis point (bp) lower vacancy rate and a $9.18 per sq. ft. asking rent premium compared with non-LEED Class B properties. This is a wider delta than for the Class A cohort, where LEED buildings have a 160-bp lower average vacancy rate and a $3.75 per sq. ft. asking rent premium. So, the Class B LEED rent advantage over non-LEED is roughly three times larger than the premium commanded by Class A LEED properties.
These findings substantiate CBRE Research’s Fall 2022 report, Green Is Good: The Enduring Rent Premium of LEED-Certified U.S. Office Buildings | CBRE UK.
Table 1: Boston Downtown Office
**Class B includes all not Class A buildings