Advocates of green building have long proposed that people want to live and work in more energy-efficient buildings. And a study analyzing the link between tenant satisfaction and a building’s sustainability adds some weight to that theory.
Real estate services firm DTZ recently surveyed the office market to evaluate the impact of three of the most common green building certifications: USGBC LEED for Existing Buildings, EPA Energy Star, and the OMB Energy and Sustainability Scorecard, says Alison Porter, DTZ's vice president of sustainability services.
The study leveraged tenant satisfaction data from Kingsley Associates, and included 61 office buildings in the company’s portfolio across D.C., Maryland, and Virginia. About half the buildings hold a certification.
“That was important, because we wanted to make sure that there wasn’t any kind of bias in the sample.”
While no substantial effect was found relating to OMB scores, LEED- and Energy Star-certified buildings performed significantly better than non-certified buildings, with satisfaction scores an average of 10 points higher for the former and 30 points higher for the latter—numbers Porter admits she was surprised by.
“I was expecting to find a slight correlation, but to be honest there’s so many things that go into satisfaction that I thought maybe there wouldn’t be such a strong relationship,” she says. “But in this case, we definitely found that there was a very strong correlation.”
The DTZ research focused on office buildings shows a strong correlation in multifamily as well. “In the sense of what is making tenants happy … having a conscientious owner and well-running systems in a building is absolutely just as important, if not maybe more, in people’s homes.”
Sustainability Making a Difference
That’s certainly been the experience of WinnCompanies, which has been ambitious about making significant performance improvements in its portfolio, renovating older properties with more efficient systems, and investing in solar power, says Darien Crimmin, vice president of energy and sustainability for the firm.
Long-term operational costs and more satisfied residents are two big payoff for investing in upgrades, but Crimmin says some executives may shutter at the upfront costs.
“People want to live in green apartments; they want to see the transition to clean power," he says. "We’ve seen very positive feedback from residents related to solar and the green features of our apartments after we retrofit them, and we expect that to continue."
In DTZ’s study, ENERGY STAR-certified buildings had by far the highest satisfaction score correlation, which Porter attributes to the greater comfort of well-insulated and well-run buildings. Crimmin agrees with the premise, noting the retrofits that inspire an immediate response from residents are those that improve the comfort level of their living space, such as added insulation or better windows.
“Residents really appreciate that, and really understand how new technology or an upgrade can benefit them," he notes. "We’ve also seen residents say they really like the better light quality with new LEDs."
Owners and managers can reap several benefits of green investments especially as utility prices skyrocket in many regions. Resident demand is only one additional benefit.
“I think the future of utility prices will really drive investments in efficiency,” he notes. “I think owners are going to continue to be opportunistic by investing in efficiency where there’s a payback, where there’s good utility or state incentives to spur that.”
Motivated by Green
DTZ hopes that studies like this one will outline incentives for building owners who remain skeptical as calls for green upgrades continue to grow.
Porter notes that while the study can only show correlation, not causation, between sustainability and satisfaction, the analysis is a first step in helping owners and managers understand which green building techniques provide the biggest bang for the buck.
“We spend a lot of time trying to make sure that whatever we’re suggesting is based on good evidence,” she says. “People are hungry for this kind of data.”
According to Porter, efficiency in multifamily buildings is set to become a major growth area in 2015 and beyond, driven partially by the relatively new availability of an Energy Star certification for existing multifamily buildings.
“Now that there’s an ENERGY STAR score [available], it’s made it a lot easier and we’ve actually had a spike in interest,” she says. “We’re really excited about multifamily and some of the work and the opportunities we’re finding there.”
Crimmin agrees that the growing awareness of the benefits from building sustainably will cause it to become even more important in the multifamily world. “I think what we’re witnessing is a long-term trend,” he says. “The need to be efficient is something that’s going to stay with us forever.”