Environmental Protection

How Did Your City Rank in the 2011 Green Building Opportunity Index?

San Francisco again leads the 30 largest office markets for green opportunities, according to the 2011 Green Building Opportunity Index released by global real estate company Cushman & Wakefield, in collaboration with the Northwest Energy Efficiency Alliance's (NEEA) BetterBricks initiative.

The Green Building Opportunity Index remains 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.  As in the inaugural 2010 version, the Index focuses on the primary factors that influence successful development, retrofitting, leasing and sales of investment grade green office buildings in the largest U.S. Central Business Districts (CBDs). It compares a market's relative position to its peers in six categories: Office Market Conditions, Investment Outlook, Green Adoption and Implementation, Local Mandates and Incentives, State Energy Initiatives and Green Culture.  For 2011, the Index has been enhanced by adding five new markets and refining the methodology and data inputs – yielding a more comprehensive view into market influences that determine where sustainable development brings competitive advantages.

The 2011 Green Building Opportunity Index's top 10 markets overall:

  1. San Francisco
  2. Midtown NY
  3. Washington, D.C.
  4. Midtown South NY
  5. Los Angeles
  6. Boston
  7. Downtown NY
  8. Portland
  9. Seattle
  10. Oakland

"Green and sustainable building initiatives play a large role in solidifying a CBDs rank in the Green Building Index," said Peter Wilcox, Senior Manager, Commercial Sector, NEEA's BetterBricks.  "For example, Seattle's adoption of the Energy Disclosure Ordinance and Portland's stimulus-funded existing building renewal of the Edith Green/Wendell Wyatt Federal Building are two examples that demonstrate how changes to either the regulatory scheme or market fundamentals can dramatically change the market viability of green building adoption."

As a tool to examine the overall climate for green building, the Index assists a broad spectrum of professionals to determine where the favorable conditions exist.

  • Investment/pension fund managers and developers can use this data to consider where to put their money and why.
  • City policy makers, utility staff and planners can examine the data to understand what new policies and incentives might be useful to accelerate green building activity.
  • Building owners, architects and green building consultants can determine where green development brings competitive advantages, or where it is simply an emerging standard.

"The second annual Green Building Opportunity Index provides in-depth analysis and insight in determining how individual markets improve as a result of changes in incentives, policies and other market influences that are critical for green building," said Cushman & Wakefield's Theddi Wright Chappell, Senior Managing Director and National Practice Leader of the Green Advisory Practice within Cushman's Valuation & Advisory group.  "In addition to serving as an excellent due diligence tool for the private sector, the Index is a first-rate resource to guide city leaders and urban planners as they set sustainability goals for their region, and it reflects the market nuances that bring competitive advantages to an urban commercial real estate market."

"Transportation and proximity between employment and residency is proven to be a major – often the major – contributor to a city's carbon and energy impact, and a key factor in employee health and productivity," said Peter Wilcox, Senior Manager, Commercial Sector, NEEA's BetterBricks. "Because both employees and employers are beginning to recognize this connection, it is rightly becoming a key metric for green culture. Integrating Walk Score® into this year's Index is a great way to reflect the outsized impacts of car-intensive  places versus compact, transit oriented, and mixed use central business districts like Portland's."

Green Building Opportunity Index Profile Reports on Seattle and Midtown New York

In addition to producing the Green Building Opportunity Index (GBOI), Cushman & Wakefield and NEEA's BetterBricks also created GBOI Profile Reports for two of the top 30 markets—Seattle and Midtown New York. These in-depth GBOI Profile Reports offer a detailed analysis of a number of green factors specific to those cities, including a green office index, office market statistics, significant lease transactions, major investment sales, review of LEED certified and ENERGY STAR® labeled buildings, a look at mandates and incentives and more.

Top cities in each of the six categories

The Green Building Opportunity Index ranks each of the 30 markets on a scale comprised of six main categories. How each city ranks for each of the six individual categories is reported on as well.

Office Market Conditions:  assesses current market fundamentals, incorporating a combination of metrics including rent, vacancy, leasing activity and absorption.  Top markets in this category: Portland, Midtown South New York and Midtown New York.

Investment Outlook: displays forecasted future conditions through the application of Cushman & Wakefield's proprietary forecasting methodology, which includes forecasted rent growth, employment growth and incoming supply. Top markets in this category: San Francisco, Midtown South New York and Midtown New York.

Green Adoption & Implementation: includes total square footage of LEED certified CBD office space, total square footage of ENERGY STAR® CBD office space, number of LEED accredited professionals per capita and more. Top markets in this category: Washington, D. C., Chicago and Denver.

Local Mandates & Incentives: assesses a municipality's commitment to sustainable building practices, including state, county and city laws; energy incentives and availability of direct funding. Top markets in this category: Washington, D.C., San Francisco and Midtown South New York.

State Energy Initiatives: ranks the effectiveness of state energy policies as measured by the American Council for an Energy Efficient Economy (ACEEE). All California cities (San Francisco, San Diego, Los Angeles, Orange County and Oakland) received a score of 100.

Green Culture: measures a region's cultural attitudes and commitment to green and sustainable practices. Data from Sustain Lane, "the largest online resource for going green" that ranks a city's performance in 16 different areas, was analyzed and ranked relative to its influence on commercial real estate. Top markets in this category: San Francisco, Midtown South New York, Midtown New York, Downtown New York (New York City scores tied) and Boston.

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