A market-driven green office building index

This paper reports on the development and potential implementation of a new green office building rating index intended for building owners and real estate office portfolio managers. It provides a market-driven green scoring method applicable to most U.S. office buildings. The underlying index data draws from office tenant surveys and hedonic analysis of rent rolls. This paper details the development and first steps towards implementation of the scoring system. A variety of models are analyzed, discussed, optimized, and tested on a captive sample of 197 U.S. office buildings. A reasonable model shows that about 40% of the non-LEED-certified buildings score higher than the lowest scoring LEED-certified building. This indicates a market may be present for this type of measurement tool. Office and portfolio managers could use this index to market the sustainability features in their buildings and obtain a market premium for these features.