The Journal of Real Estate Finance and Economics

, Volume 52, Issue 2, pp 117–140 | Cite as

Certification Matters: Is Green Talk Cheap Talk?

  • Shaun A. Bond
  • Avis DevineEmail author


There is an active and growing literature examining the rental rate, sales price, and occupancy premiums associated with sustainable or energy efficient certified real estate. To date, the focus has rested largely on office properties and for sale single family residential properties. We examine the rental rates achieved by green multifamily properties, providing the first look at the population of LEED market-rate apartments in the United States. We find an approximate 8.9 % rental rate premium associated with LEED apartments. Moreover, this research provides the first indication that LEED certification garners an additional premium over non-certified space that identifies as green, indicating the strength of the certification signal and contributing to the longstanding discussion on the merits of certification.


Energy efficiency Sustainability Rent premium Multifamily 

JEL Classification

R11 R52 R58 



The authors would like to thank Michael Ferguson, David Brasington, and the participants at the 2015 AREUEA Annual Meeting, 2014 AREUEA International Meeting, Pepperdine University Speaker Series, and 2014 EBS Real Estate Conference for their helpful comments.


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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Department of Finance and Real EstateUniversity of CincinnatiCincinnatiUSA
  2. 2.College of Business + EconomicsUniversity of GuelphGuelphCanada

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