Most Tenants Won't Pay More for Green Leases - Real Estate * US * News * Story

Runway Angels
The superbowl of fashion shows, models walk down the runway at the 2009 Victoria's Secret Fashion Show.
The Richest Members of the US Congress
Recently, the Center for Responsive Politics found that there are 237 millionaires in the US Congress.
10 Tips to Get Out of Debt
Renowned financial author Gail Vaz-Oxlade takes a tough-love approach to helping couples in a financial crisis to face reality.

FEATURED QUIZZES

How Much Do You Know About Green?
Green has become part of our everyday lives. Green is everywhere-- energy, clothing, food, housing, transportation. It's a big business and a global business.
The Billionaire BFF's
Philanthropists. Bridge partners. Hockey players. Which responses are based on facts from Buffett's and Gates' real lives?
The Many Myths of Coca-Cola
Can you tell which statements are true, and which ones are just rumors?

SPECIAL REPORTS

Winterizing Your Portfolio
If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.
Investor's Guide to Real Estate
Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.
Alternative Investing
Stocks and bonds? Sure. But it's a big world out there for investors.

CNBC ON DIGG

Most Tenants Won't Pay More for Green Leases

Published: Tuesday, 10 Nov 2009 | 8:48 AM ET

Text Size

By: Reuters

About two-thirds of global corporates are not prepared to pay higher rents to take space at "green" buildings, even though 70 percent of them view sustainability as a critical business issue, a survey showed.

RELATED LINKS

The third annual sustainability survey by trade body CoreNet Global and consultant Jones Lang LaSalle, showed more companies were considering the environmental impact of their lettings contracts but only a minority were prepared to shell out more cash to make a greener choice.

"It is no longer enough to simply be 'green' - organizations want to see the benefits to the bottom line," said Dan Probst, chairman of Energy and Sustainability at Jones Lang LaSalle.

Some 37 percent of the 231 corporates surveyed said they would consider paying a premium of between 1 and 10 percent on green rents, while one-fifth of respondents said they would only pay more if this was offset by lower building operating costs.

CNBC.com

Just one in 10 respondents said they did not consider sustainability criteria in making leasing decisions, while about two-fifths of occupiers said they always looked for green building certifications such as LEED, BREEAM and Green Star when choosing new premises.

The survey suggested companies were continuing to focus on strategies that were easy to implement and provided short-term cost savings, such as energy efficiency programs and waste recycling.

Two-thirds of respondents described obtaining funds to implement sustainability strategies as a "difficult" or "extremely difficult" challenge, although nearly three-quarters said they would be willing to invest in refurbishing their owned assets to hit sustainability targets.

"The findings of this survey provide stronger evidence than ever that sustainability concerns are impacting on corporate real estate decision-making," said Julie Hirigoyen, lead director of Jones Lang LaSalle Sustainability Services.

"As this message filters through the markets, we may begin to see signs of a two-tier market emerging whereby buildings that do not meet certain sustainability standards incur higher rates of depreciation and obsolescence," she said.