The Green Building Opportunity Index is the first office market assessment tool to provide weighted comparisons of top U.S. Office markets on the basis of both real estate fundamentals and green development considerations. Focusing on primary factors that influence successful development, retro-fitting, leasing and sales of investment grade "green" office building in the 25 largest U.S. CBDs, the Index compares a market\'s relative position to its peers in 6 catagories: Office Market Conditions, Investment Outlook, Green Adoption & Implementation, Mandates & Incentives, State Energy Initiatives, and Green Culture
2. What is a Green Building? For example
to derive the rankings for the investment outlook
For the purposes of this research, green buildings
category, the following variables were used:
are those which are certified through third party
verified standards on the basis of their sustainability • 2-year forecasted rent Growth as %
and energy efficient programs. Buildings certified • 3-year Office-Using employment Growth
through the U.S. Green Building Council’s Leadership • Incoming supply (space currently under construction)
in Energy and Environmental Design (LEED) program
a specific market may receive a “score” of 45 on 2-year
and those which have earned the Environmental
rent growth, 73 on 3-year employment growth and 87
Protection Agency’s ENERGY STAR ® label were
on incoming supply. this provides a total of 205 for the
included in the compilation of data for the Index.
category. If this is the highest score of all, then this total is
indexed to 100 and the other markets adjusted accordingly.
thus, by indexing each category ranking, a general
How the points are scored sense of scale across all scores is evidenced. a market
the Index ranks each market on a scale comprised of six with a score of 65 is achieving 65% of the points that the
main categories. to determine a market’s position in a highest ranking market achieved. the summary presented
particular category, each is ranked across several variables. beneath the Index graph on page 1 reflects the numerical
then, the market with the highest score is assigned a value rankings of the individual cities. More in-depth discussions
of 100, with the remaining markets receiving a value based of individual markets and their rankings are published
on their position relative to the leader. the results for each separately as Green Building Opportunity index profiles.
variable are then totaled, giving a combined market Contact information for ordering individual market profiles
score for the category. the summarized scores are then is presented on the last page of this report.
recalibrated, with the highest market total set to a value
of 100. the remaining markets then receive a final ranking
based on their position relative to the leader.
Green Market Conditions
Office Adoption & Implementation
this criterion identifies and CBD OffICe Marke t CONDItION sCOres
Minneapolis
assesses current market Orange County
Houston
fundamentals. It incorporates San Francisco
Chicago
a combination of metrics San Diego
Midtown N.Y.
including: rent, vacancy, leasing Downtown N.Y.
Denver
activity and absorption. Atlanta
Pittsburgh
Portland
included variables: Washington D.C.
Midtown South N.Y.
– Class A Vacancy Rate Boston
Oakland
– Overall (all classes) Vacancy Rate Detroit
– Leasing Activity as a % Inventory Miami
Seattle
– Y
ear-over-Year Change in Los Angeles
Absorption as a % Inventory Philadelphia
Phoenix
Cleveland
Baltimore
Dallas
0 20 40 60 80 100
Minneapolis .................. 100.0 atlanta ............................ 86.9 seattle ............................ 82.8
Orange County ............... 95.1 Pittsburgh ....................... 86.6 Los angeles .................... 82.2
Houston .......................... 92.4 Portland .......................... 86.0 Philadelphia .................... 80.2
san francisco................. 92.3 Washington D.C. ............ 86.0 Phoenix........................... 80.1
Chicago .......................... 90.4 Midtown south N.Y......... 85.0 Cleveland........................ 77.2
san Diego ....................... 90.0 Boston ............................ 84.8 Baltimore ........................ 76.1
Midtown N.Y. .................. 89.3 Oakland .......................... 84.5 Dallas .............................. 75.9
Downtown N.Y. ............... 87.6 Detroit ............................. 84.2
Denver ............................ 87.5 Miami .............................. 83.7
Green BuildinG OppOrtunity index: National Overview: Central Business Districts | Page 2
3. Investment Outlook
this category displays forecasted C B D I N v e s t M e N t O U t LO O k s C O r e s
San Francisco
future conditions through the Boston
Midtown South N.Y.
application of Cushman & Midtown N.Y.
Oakland
Wakefield’s proprietary forecasting Dallas
Los Angeles
methodology. Both demand drivers Pittsburgh
Chicago
and supply-side pressures are used Orange County
Minneapolis
to rank markets on their relative Houston
Portland
position considering where they will San Diego
Atlanta
likely be in two to three years. Philadelphia
Denver
Detroit
included variables: Baltimore
Washington D.C.
– -year Forecasted Rent Growth as %
2 Phoenix
Downtown N.Y.
– -year Office-Using Employment Growth
3 Seattle
– ncoming Supply as a % Inventory
I Cleveland
Miami
(space currently under construction)
0 20 40 60 80 100
san francisco............... 100.0 Orange County ............... 95.7 Baltimore ........................ 93.8
Boston ............................ 98.1 Minneapolis .................... 95.7 Washington D.C. ............ 93.6
Midtown south N.Y......... 96.9 Houston .......................... 95.6 Phoenix........................... 93.2
Midtown N.Y. .................. 96.6 Portland .......................... 95.6 Downtown N.Y. ............... 93.0
Oakland .......................... 96.5 san Diego ....................... 95.6 seattle ............................ 92.1
Dallas .............................. 96.5 atlanta ............................ 95.4 Cleveland........................ 91.1
Los angeles .................... 96.5 Philadelphia .................... 94.8 Miami .............................. 90.4
Pittsburgh ....................... 96.3 Denver ............................ 94.6
Chicago .......................... 96.2 Detroit ............................. 94.1
Green Adoption & Implementation
this category addresses the potential C B D G r e e N a D O P t I O N & I M PL e M e N tat I O N s C O r e s
Chicago
to execute green development and/or Denver
Washington D.C.
redevelopment in the city – identifying Seattle
the current level of existing and San Francisco
Boston
planned green projects, as well as Oakland
Minneapolis
other factors such as the number Midtown N.Y.
Houston
of LeeD aPs who are mechanical Orange County
Los Angeles
engineers (and can thereby facilitate Portland
Atlanta
the commissioning process). these Baltimore
Downtown N.Y.
factors, coupled with quantifying Philadelphia
San Diego
the number of buildings that have Detroit
Dallas
earned the eNerGY star label, Pittsburgh
Miami
offer insight into market “maturity” in Phoenix
Cleveland
terms of developing green inventory. Midtown South N.Y.
0 20 40 60 80 100
included variables:
– T
otal sf of LEED Certified CBD Office Space Chicago ........................ 100.0 Houston .......................... 59.6 Detroit ............................. 23.9
Denver ............................ 88.5 Orange County ............... 58.6 Dallas .............................. 23.0
– T
otal sf of LEED Certified as a % Inventory Washington D.C. ............ 84.7 Los angeles .................... 52.8 Pittsburgh ....................... 19.3
– T
otal sf ENERGY STAR seattle ............................ 83.3 Portland .......................... 47.2 Miami .............................. 17.9
– T
otal sf ENERGY STAR as a % Inventory san francisco................. 79.3 atlanta ............................ 42.6 Phoenix........................... 17.0
Boston ............................ 68.5 Baltimore ........................ 40.2 Cleveland........................ 12.6
– #
Accredited LEED Professionals per Capita Oakland .......................... 67.0 Downtown N.Y. ............... 39.3 Midtown south N.Y........... 9.7
– #
Accredited Mechanical Engineers with Minneapolis .................... 66.7 Philadelphia .................... 34.0
LEED AP Midtown N.Y. .................. 62.6 san Diego ....................... 26.9
Green BuildinG OppOrtunity index: National Overview: Central Business Districts | Page 3
4. Mandates & Incentives
Investment Outlook
this category assesses a M a N Dat e s & I N C e N t I v e s s C O r e s
Midtown N.Y.
municipality’s commitment to Downtown N.Y.
Midtown South N.Y.
sustainable building practices both San Francisco
Los Angeles
through mandates and incentives Washington D.C.
Oakland
to build and/or refurbish green Chicago
San Diego
development/investment/retro- Baltimore
Orange County
fits. It analyzes state and local Boston
Houston
incentives and is organized into two Dallas
Seattle
sections. Both sections focus on Denver
Pittsburgh
the impact that the incentives and Cleveland
Minneapolis
mandates will have on the private Portland
Philadelphia
sector in particular. Miami
Atlanta
included variables: Phoenix
Detroit
– tate, County and City Laws
S 0 20 40 60 80 100
and Ordinances
– xpedited Permitting
E Midtown N.Y. ................ 100.0 Baltimore ........................ 75.0 Minneapolis .................... 37.5
Downtown N.Y. ............. 100.0 Orange County ............... 62.5 Portland .......................... 37.5
– Permit Fee Reductions/Discounts Midtown south N.Y....... 100.0 Boston ............................ 62.5 Philadelphia .................... 37.5
– Density Bonuses san francisco................. 87.5 Houston .......................... 62.5 Miami .............................. 37.5
Los angeles .................... 87.5 Dallas .............................. 62.5 atlanta ............................ 37.5
– Energy Incentives* Washington D.C. ............ 87.5 seattle ............................ 50.0 Phoenix........................... 25.0
– Availability of Direct Funding Oakland .......................... 75.0 Denver ............................ 50.0 Detroit ............................. 25.0
Chicago .......................... 75.0 Pittsburgh ....................... 50.0
* hough a few of the states represented
T san Diego ....................... 75.0 Cleveland........................ 50.0
in our study do provide energy incentives,
every effort was made not to duplicate
consideration of the programs included
in the State Energy Incentive analysis below.
Mandates & incentives Criteria
the first criterion, mandates, measures on a four-point the four-point scale analyzes mandates and incentives
scale how aggressively a municipality is requiring green separately in each of the cities ranked and characterizes
aspects in development or requiring green development each as: Minimal, Basic, Moderate or aggressive.
in its entirety. the second criterion, incentives, also the blended “score” is then utilized to rank the cities
uses a four-point scale to measure the benefits that according to how aggressive (or not) each is, considering
municipalities provide for developing green, including the variables.
incentives related to financing, permitting and density.
Incentives & Mandates: Future Studies
In analyzing the impact of local area incentives of green building and energy efficiency regulations
and mandates on green buildings, the research team on the market. Furthermore, the acceleration and rapid
encountered a myriad of policy approaches. For adoption in recent months of both more stringent code
purposes of the Index, ranking each jurisdiction’s regulations and more generous incentives in cities
regulatory environment became – by necessity – a across America (New York City, Washington D.C.,
subjective exercise. The four categories described Austin, Seattle and others) further supports a more
above give a high-level indication of how aggressive in-depth examination of the efficacy of these policies.
each jurisdiction is in promoting green buildings. The Index research team is currently evaluating
A more quantitative approach, tying specific policy methodological approaches and resource requirements
approaches to pro forma building financials, would be to conduct further research on this topic.
a valuable next step in understanding the true impact
Green BuildinG OppOrtunity index: National Overview: Central Business Districts | Page 4
5. State Energy Initiatives
s tat e e N e r GY I N I t I at I v e s C O r e s
this category ranks the effectiveness
San Francisco
of state energy policies as measured Oakland
Los Angeles
by the american Council for an Orange County
San Diego
energy-efficient economy (aCeee). Portland
Midtown N.Y.
Downtown N.Y.
Midtown South N.Y.
included variables: Seattle
Minneapolis
– Utilities and Public Benefits Boston
Efficiency Policy Baltimore
Chicago
– Building Code Score Houston
– Combined Heat and Power Score Dallas
Philadelphia
– Appliance Standards Pittsburgh
Miami
– State Lead by Example R&D Washington D.C.
– Financial Information Incentives Cleveland
Phoenix
Denver
ONLINe sOUrCe Atlanta
Detroit
For more information on state energy initiatives,
visit the ACEEE website: www.ACEEE.org. 0 20 40 60 80 100
san francisco............... 100.0 seattle ............................ 54.9 Miami .............................. 41.1
Oakland ........................ 100.0 Minneapolis .................... 54.3 Washington D.C. ............ 35.9
Los angeles .................. 100.0 Boston ............................ 53.4 Cleveland........................ 34.8
Orange County ............. 100.0 Baltimore ........................ 51.6 Phoenix........................... 31.3
san Diego ..................... 100.0 Chicago .......................... 46.1 Denver ............................ 23.8
Portland .......................... 84.4 Houston .......................... 44.2 atlanta .............................. 9.7
Midtown N.Y. .................. 70.2 Dallas .............................. 44.2 Detroit ............................... 9.0
Downtown N.Y. ............... 70.2 Philadelphia .................... 43.3
Midtown south N.Y......... 70.2 Pittsburgh ....................... 43.3
Green Culture
this criterion measures a region’s C B D G r e e N C U Lt U r e s C O r e s
Downtown N.Y.
cultural attitudes and commitment Portland
Miami
to green and sustainable practices. Boston
Data from sustainLane, “the largest San Francisco
Chicago
online resource for going green,” Midtown N.Y.
Minneapolis
was analyzed and ranked relative Seattle
Baltimore
to its influence on commercial real San Diego
Washington D.C.
estate. sustainLane ranks a city’s Denver
Oakland
performance in 16 different areas. Philadelphia
Los Angeles
Cushman & Wakefield selected the Orange County
Phoenix
four categories deemed most relevant Dallas
Cleveland
to commercial real estate to rank the Atlanta
Midtown South N.Y.
individual cities in this analysis. Houston
Pittsburgh
Detroit
included variables:
0 20 40 60 80 100
– G
reen Economy
– C
ity Innovation Downtown N.Y. ............. 100.0 Baltimore ........................ 93.3 Dallas .............................. 83.6
Portland .......................... 98.0 san Diego ....................... 91.1 Cleveland........................ 81.8
– P
lanning & Land Use Miami .............................. 97.5 Washington D.C. ............ 90.9 atlanta ............................ 81.8
– T
ransit Ridership Boston ............................ 97.3 Denver ............................ 90.6 Midtown south N.Y......... 80.0
san francisco................. 96.0 Oakland .......................... 89.4 Houston .......................... 78.9
Chicago .......................... 96.0 Philadelphia .................... 89.2 Pittsburgh ......................... 0.0
ONLINe sOUrCe Midtown N.Y. .................. 95.7 Los angeles .................... 86.7 Detroit ............................... 0.0
For more information on green culture, visit the Minneapolis .................... 95.5 Orange County ............... 86.7
SustainLane website: www.SustainLane.com. seattle ............................ 94.8 Phoenix........................... 86.1
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