The Journal of Real Estate Finance and Economics

, Volume 41, Issue 2, pp 228–243

Green Design and the Market for Commercial Office Space

  • Jonathan A. Wiley
  • Justin D. Benefield
  • Ken H. Johnson

DOI: 10.1007/s11146-008-9142-2

Cite this article as:
Wiley, J.A., Benefield, J.D. & Johnson, K.H. J Real Estate Finan Econ (2010) 41: 228. doi:10.1007/s11146-008-9142-2


This paper considers the relationship between energy-efficient design and the leasing/sales markets for commercial real estate. An economic model is provided that considers lease rates and occupancy in simultaneous equilibrium. The behavior of both is predicted to be influenced by efficient design attributes. Selling price is determined by both rents and occupancy; therefore the impact of efficient design on commercial sales activity should be distributed through the leasing market. The model is tested empirically using a national sample of sales and leasing data for class A office buildings. The evidence indicates that “green” buildings achieve superior rents and sustain significantly higher occupancy. The improved performance in the rental market is reflected in a significant premium for the selling price of Energy Star-labeled and LEED-certified properties.


Green design Office Leasing Pricing 

Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  • Jonathan A. Wiley
    • 1
  • Justin D. Benefield
    • 1
  • Ken H. Johnson
    • 2
  1. 1.College of CharlestonCharlestonUSA
  2. 2.Florida International UniversityMiamiUSA

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