SAVE MORE BY BUILDING GREEN BUILDINGS
High efficiency and performance can result in higher property values and potentially lower lenders’ credit risk. Lower operating costs associated with more efficient systems can lead to higher building net income. The value of a l00,000-square-foot office building increases by over $1 million through implementation of green building measures. These measures, associated with energy, water, waste, and labor, result in annual operating savings of $101,400. The increased building value is calculated by using a fairly conservative building market capitalization rate—a formula used by building appraisers, brokers, and lenders to calculate a building’s value—of 10 percent on the savings. A building’s value is derived by dividing its net operating income, or savings, by the market capitalization rate. In addition to increasing a building’s net operating income or value, green building measures may allow building owners to charge higher rents or achieve higher rates of building occupancy