Green Building Performance

This work investigates the performance of green office buildings at the direct property level. The green building movement has its origin in the sustainability trend that deals with the worldwide growing environmental consciousness. To date, several authors discussed the benefits of green building from a tenants' point of view. The possible benefits for the real estate investors or owners, however, have hardly been part of this discussion, and is therefore the focus of this work. It is investigated and shown that real estate investors with a sustainability focus encounter significant financial benefits. They ceteris paribus receive higher rent income from the tenants in their green office buildings and face lower vacancy, thereby maximizing their revenues. In addition, a relationship is found between green buildings and building characteristics such as builing size, age and height. This leads to opportunities for investors who could take advantage of this knowledge. Overall, the results indicate that green building pays off, not only for the environment but also for investor returns.