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Sustainable Building Certification and the Rent Premium: A Panel Data Approach

  • Alexander Reichardt


    (EBS Universität für Wirtschaft und Recht i. Gr)

  • Franz Fuerst


    (University of Reading Whiteknights)

  • Nico B. Rottke


    (EBS Universität für Wirtschaft und Recht i. Gr.)

  • Joachim Zietz


    (EBS Universität für Wirtschaft und Recht i. Gr.)

This paper investigates whether obtaining sustainable building certification entails a rental premium for commercial office buildings and tracks its development over time. To this aim, both a difference-in-differences and a fixed-effects model approach are applied to a large panel dataset of U.S. office buildings in the period 2000-2010. The results indicate a significant rental premium for both Energy Star and LEED certified buildings. Controlling for confounding factors, this premium is shown to have increased steadily from 2006-2008, followed by a moderate decline in the subsequent periods. The results also show a significant positive relationship between Energy Star labeling and building occupancy rates.

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Article provided by American Real Estate Society in its journal journal of Real Estate Research.

Volume (Year): 34 (2012)
Issue (Month): 1 ()
Pages: 99-126

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Handle: RePEc:jre:issued:v:34:n:1:2012:p:99-126
Contact details of provider: Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
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Order Information: Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
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