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The Impact of LEED-Energy Star Certified Office Buildings on the Market Values of Neighboring Areas in New York City

  • Suh, Min Jae (Department of Engineering Technology, Sam Houston State University) ;
  • Zhang, Yang (Department of Urban Planning and Affair, Virginia Tech) ;
  • Ahn, Yong Han (Department of Architectural Engineering, Hanyang University-Erica) ;
  • Ma, Junkun (Department of Engineering Technology, Sam Houston State University) ;
  • Pearce, Annie R. (Department of Building Construction, Virginia Tech)
  • Received : 2019.04.29
  • Accepted : 2019.05.31
  • Published : 2019.06.30

Abstract

Green building certifications are being adopted widely, and existing research continues to show an array of benefits to stakeholders of green certified buildings. However, little attention has been paid thus far to the effects these buildings may have on their surrounding neighborhoods economically. This research examined the effect of LEED and/or Energy Star certification on the neighborhoods surrounding certified office buildings from an economic standpoint with spatial and statistical analyses. This research showed the unit market value of LEED and/or Energy Star certified office buildings and the parameters of LEED and/or Energy Star certification had statistically a positive impact on the median unit market value of their neighborhood areas. The findings can provide useful insights into the possibilities for additional economic benefits of their neighborhoods, encouraging a win-win approach that enhances the local real estate market.

Keywords

LEED and/or Energy Star certified office building;market value;neighborhood area;walking distance;median unit market value

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FIGURE I. DISTRIBUTION OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING (OVERVIEW)

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FIGURE II. DISTRIBUTION OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING (UPTOWN)

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FIGURE III. DISTRIBUTION OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING (MIDTOWN)

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FIGURE IV. DISTRIBUTION OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING (DOWNTOWN)

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FIGURE V. DISTRIBUTION OF NEIGHBORHOOD OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING (OVERVIEW)

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FIGURE VI. DISTRIBUTION OF NEIGHBORHOOD OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING (UPTOWN)

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FIGURE VII. DISTRIBUTION OF NEIGHBORHOOD OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING (MIDTOWN)

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FIGURE VIII. DISTRIBUTION OF NEIGHBORHOOD OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING (DOWNTOWN)

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FIGURE IX. DISTRIBUTION OF NEIGHBORHOOD OF ENERGY STAR ONLY CERTIFIED OFFICE BUILDING (OVERVIEW)

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FIGURE X. DISTRIBUTION OF NEIGHBORHOOD OF ENERGY STAR ONLY CERTIFIED OFFICE BUILDING (UPTOWN)

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FIGURE XI. DISTRIBUTION OF NEIGHBORHOOD OF ENERGY STAR ONLY CERTIFIED OFFICE BUILDING (MIDTOWN)

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FIGURE XII. DISTRIBUTION OF NEIGHBORHOOD OF ENERGY STAR ONLY CERTIFIED OFFICE BUILDING (DOWNTOWN)

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FIGURE XIII. DISTRIBUTION OF NEIGHBORHOOD OF LEED ONLY CERTIFIED OFFICE BUILDING (OVERVIEW)

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FIGURE XIV. DISTRIBUTION OF NEIGHBORHOOD OF LEED ONLY CERTIFIED OFFICE BUILDING (MIDTOWN)

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FIGURE XV. DISTRIBUTION OF NEIGHBORHOOD OF LEED ONLY CERTIFIED OFFICE BUILDING (DOWNTOWN)

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FIGURE XVI. DISTRIBUTION OF NEIGHBORHOOD OF LEED AND ENERGY STAR CERTIFIED OFFICE BUILDING (OVERVIEW)

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FIGURE XVII. DISTRIBUTION OF NEIGHBORHOOD OF LEED AND ENERGY STAR CERTIFIED OFFICE BUILDING (MIDTOWN)

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FIGURE XVIII. DISTRIBUTION OF NEIGHBORHOOD OF LEED AND ENERGY STAR CERTIFIED OFFICE BUILDING (DOWNTOWN)

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FIGURE XIX. NO SUBWAY ENTRANCE IN THE NEIGHBORHOOD OF 1 N END AVE

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FIGURE XX. NO SUBWAY ENTRANCE IN THE NEIGHBORHOOD OF 333 E 38TH ST

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FIGURE XXI. NO SUBWAY ENTRANCE IN THE NEIGHBORHOOD OF 636 11TH AVE

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FIGURE XXII. OVERLAPPING AREAS OF NEIGHBORHOODS OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDINGS5)

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FIGURE XXIII. PROPORTION OF LEED CERTIFICATION LEVELS IN THE SAMPLE GROUP

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FIGURE XXIV. TRENDS IN NEIGHBORHOOD MEDIAN UNIT MARKET VALUES ($/sq-ft) FROM 2007 THROUGH 2013

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FIGURE XXV. NUMBER OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDING IN MANHATTAN NYC

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FIGURE XXVI. LINEAR CORRELATION BETWEEN TWO VARIABLES OVER TIME

TABLE I. EFFECTS OF EXTERNAL ENVIRONMENTAL FEATURES ON NEIGHBORHOOD PROPERTY VALUES

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TABLE II. WALKABLE DISTANCE CONSIDERED CONVENIENT BY PEDESTRIANS

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TABLE III. THE DESCRIPTION OF VARIABLES AND DATA SOURCE

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TABLE IV. THE DEFINITION OF THE COVERAGE AND LEVEL OF 15 LEED CERTIFIED OFFICE BUILDINGS ACHIEVED MULTIPLE LEED CERTIFICATIONS

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TABLE V. THE NUMBER OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDINGS AND THE AVERAGE NUMBER OF BUILDINGS IN THE NEIGHBORHOOD FOR THOSE CERTIFIED OFFICE BUILDINGS IN MANHATTAN, NYC

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TABLE VI. CHANGES IN LEED CERTIFICATION COVERAGE OVER TIME

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TABLE VII. CHANGES IN LEED CERTIFICATION LEVEL OVER TIME

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TABLE VIII. MEDIAN UNIT MARKET VALUES OF LEED AND/OR ENERGY STAR CERTIFIED OFFICE BUILDINGS ($/sq-ft)

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TABLE IX. THE NUMBER OF OFFICE BUILDINGS ACHIEVING ENERGY STAR CERTIFICATION (2007-2013)

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TABLE X. R2 VALUE OF HEDONIC PRICE MODEL EQUATIONS FOR 2011

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TABLE XI. RESULTS OF THE LINEAR MIXED EFFECT MODEL FOR ACHIEVING LEED AND/OR ENERGY STAR CERTIFICATION

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TABLE XII. RESULTS OF THE LINEAR MIXED EFFECT MODEL FOR THE LEED CERTIFICATION LEVEL

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TABLE XIII. RESULTS OF THE LINEAR MIXED EFFECT MODEL FOR THE LEED CERTIFICATION COVERAGE

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