Will Tenant Demand Spur LEED EB Building Certification?

Sustainability, much like global warming to the scientist, is a word that has now become part of every Property Manager’s vocabulary. Having witnessed this evolution first hand, one must applaud the U.S. Green Building Counsel (USGBC) in how well they have been able to sell the greening of commercial office buildings. Survey any property manager and ask if they believe that they must be sustainable to be successful in their career, they will overwhelmingly all answer “yes!” because they must. Why is this?

America is a capitalistic society with property value predicated on supply and demand. With this in mind, what exactly is the supply of LEED EB certified buildings? And how many square feet of commercial space in Manhattan is LEED EB Certified? By last count, only twelve (12) commercial properties in all of Manhattan were LEED EB Certified which total a little under 13 Million square feet. In comparison, there is somewhere in the neighborhood of 400 Million square feet of office space in Manhattan.

Therefore, the percentage of LEED EB certified space is about 3%. Has this certification increased their property value? Are tenants demanding that they occupy space within a LEED Certified Building? By my count, I have counted almost 100 commercial office buildings registered for LEED EB. These property owners/managers, myself included, are making a bet that prospective tenants will eventually request from their brokers, much like what is starting to happen on the west coast, that they reside within a LEED EB certified building. Is this assumption correct or will New York City buck the trend and supply far outweigh demand? What do you think?

Jack Terranova, PE, LEED AP, RPA
Director of Operations
Cassidy Turley New York