Eco-Labeling, Rents, Sales Prices and Occupancy Rates: Do Leed and Energy Star Labeled Offices Obtain Multiple Premia?

Abstract

Drawing upon a large dataset of Energy Star and LEED labeled commercial office properties in the US, this paper investigates the effect of eco-labeling on rents, sale prices and occupancy rates. It differs from the first pioneering studies on this topic in that it analyzes a more comprehensive and updated datasets and seeks to resolve some of the methodological issues noted in these earlier studies. Using an OLS and quantile hedonic framework regression, we test whether the presence of an eco-label has a significant positive effect on rental rates, sale prices and occupancy rates. Finally, we explore whether eco-labeled properties have been affected disproportionately by the recent downturn in the commercial real estate market.

JEL Classification: Q5