CBRE: Chicago Remains Most Green U.S. Office Market
LOS ANGELES — Chicago’s office market maintains its top status in the 2019 edition of CBRE’s Green Building Adoption Index, an annual report that measures the energy sustainability of the top 30 office markets in the United States.
The index (GBAI) reviews the various office markets’ adoption of two green building certifications — the EPA’s Energy Star rating and the U.S. Green Building Council’s LEED certification. The GBAI is tracked in terms of both square footage and number of buildings.
More than 167 million square feet of Chicago’s office space is certified green, or approximately 71.1 percent of the metro’s total office inventory (235 rentable million square feet). Coming in behind the City of Broad Shoulders is San Francisco (67.5 percent), Atlanta (59.3 percent), Minneapolis/St. Paul (57.1 percent) and Los Angeles (56.6 percent).
Chicago is a growing and thriving office market. Tech firms such as Uber, Amazon and LinkedIn, as well as coworking concepts Spaces, Industrious and WeWork, have all taken down large swaths of office space in the metro area. According to third-quarter data from CBRE Research, more than 5 million square feet of office space is under construction in metro Chicago.
“Going green is one key to any great city,” writes Spencer Levy, chairman of CBRE’s Americas Research and the firm’s senior economic advisor. “More and more prospective tenants will not consider occupying buildings that aren’t certified as ‘green.’ The more that big investors see the value of green in their office and multifamily portfolios, the more it will spread as a clear value-add to other commercial asset classes.”
Overall, the U.S. office real estate sector is getting greener as 4,879 office buildings in the top 30 markets, or 13.8 percent, are certified green, the highest total in the index’s six-year history. In terms of square footage, 42.2 percent of total office space in those markets is green, a 30 basis point increase from the 2018 index.
In these 30 markets, about 11.9 percent of buildings are Energy Star-certified, up slightly from the 2018 GBAI that reported 11.7 percent of buildings receiving the certification. In terms of square footage, 35.8 percent of office space in those markets is Energy Star-certified, up 70 basis points from last year.
The LEED certification total is slightly down from last year in terms of both square footage (21.2 percent) and number of buildings (5.1 percent). CBRE reports that the slide in LEED-certified office space is due to either fewer re-certifications by building owners or a rise in new supply that wasn’t built to LEED standards.
Several office buildings are both Energy Star-rated and LEED-certified, according to CBRE.
Los Angeles-based CBRE developed the GBAI in 2014 in partnership with Maastricht University in the Netherlands and the University of Guelph in Ontario, Canada. For the purpose of the GBAI, CBRE Research tracks the 30 top office markets and only looks at properties that are deemed “competitive” for the local office market.
Generally speaking the office space included in the GBAI tracks office properties built since 2005 and are considered “viable options” to businesses that seek to occupy short-term office space. The GBAI excludes single-tenant, owner-occupied buildings, as well as government-owned and -occupied buildings and medical office buildings. All data is current through year-end 2018. View the full report here.
CBRE has also revealed its inaugural GBAI for the multifamily sector, more details of which can be found here.
— John Nelson