MultifamilyOfficeReports

Denver Leads Nation for Green Multifamily Building

According to the inaugural Multifamily Green Building Adoption Index by CBRE, 7 percent of Denver’s multifamily apartment units are green certified, more than double the U.S. average. The Mile High City also ranked among the greenest office markets, coming in at No. 8 in the Office Green Building Adoption Index.

“It’s no surprise Denver’s commercial spaces are getting greener, as a connection to the outdoors is what attracts many people to our region in the first place,” said Pete Schippits, senior managing director of CBRE’s Mountain States. “Today building owners are realizing the value of sustainability in many forms — from increasing operating efficiency, to improving tenant satisfaction and attracting investor interest in a property.”

The Multifamily Green Building Adoption Index found that while it is still in the early stages, 3.3 percent of all multifamily apartment units in the top-30 markets have been green certified. Denver’s green building adoption rate is more than double the U.S. average, with 17,230 green-certified units equating to 7 percent of the institutional market. Washington DC/Suburban Maryland ranked No. 2 at 6.9 percent.

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Denver’s office market is also getting greener. With 48.2 percent of its office space now green certified, up from 45.2 percent the previous year, Denver moved up one spot to now rank No. 8 among the 30 largest office markets.

The 2019 Green Building Adoption Index found green certified office space across America’s 30 largest office markets has reached 42.2 percent, up from 41.9 percent last year, marking a new high. Chicago took the top spot in the Green Building Adoption Index for the third straight year, with 71 percent of its space green certified.

CBRE, Maastricht University and Universtiy of Guelph researchers, in partnership with the National Multifamily Housing Council, also note that building certification has become a more recognized and important part of a building’s profile in U.S. capital markets. Recent research shows that commercial mortgages collateralized by green-certified office buildings have significantly lower default rates, which implies that it may be beneficial for lenders to factor the energy and sustainability performance of buildings into mortgage pricing.

“We have seen building owners become more green-minded in recent years and to have lenders begin to incentivize green behavior is a win for everyone—landlords, tenants and the planet,” said Brady O’Donnell, vice chairman with CBRE Capital Markets, Debt & Structured Finance.

This is the sixth release of the annual Green Building Adoption Index and the inaugural Multifamily Green Building Adoption Index. Based on a rigorous methodology, the Green Building Adoption Index shows the growth of ENERGY STAR- and LEED-certified space for the 30 largest U.S. office markets, both in aggregate and in individual markets, since 2005. The Multifamily Green Building Adoption Index shows totals for ENERGY STAR-, LEED-, and National Green Building Standard-certified space for the 30 largest U.S. multifamily markets.

 

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