San Francisco is the top market for high-performance, energy-efficient office buildings, according to the Green Building Opportunity Index published by Cushman & Wakefield and Northwest Energy Efficiency Alliance's (NEEA) BetterBricks initiative. The index provides weighted comparisons of top U.S. markets based on real estate fundamentals and green development considerations.
The index compared the 25 largest U.S. central business districts (CBDs) in six categories: office market conditions, investment outlook, green adoption and implementation, local mandates and incentives, state energy initiatives, and green culture. The top 10 CBDs are, in order, San Francisco; Oakland, Calif.; Midtown New York, N.Y.; Los Angeles; Chicago; Orange County, Calif.; Downtown New York, N.Y.; Washington, D.C.; San Diego; and Boston.
For the purposes of the index, green buildings were considered as those buildings that are certified through third-party-verified standards on the basis of their sustainability and energy efficient programs. These included buildings certified through the U.S. Green Building Council's LEED program and the Environmental Protection Agency's Energy Star label.
Within each category researched, the index ranked cities by numerous variables. In assessing office market conditions, the index considered current market fundamentals including rent, Class A vacancy rates, overall vacancy rates, leasing activity, and absorption. Within this specific category, the top five markets were Minneapolis, Minn.; Orange County, Calif.; Houston, Texas; San Francisco; and Chicago.
The investment outlook category forecast future conditions through Cushman & Wakefield's forecasting methodology, using demand drivers and supply-side pressures to rank markets considering where they likely will be in two to three years. The top five markets were San Francisco; Boston; Midtown south, New York, N.Y.; Midtown New York, N.Y.; and Oakland, Calif.
The green adoption and implementation category identified current levels of existing and planned green projects, including the total square footage of LEED-certified office space, as well as factors such as the number of LEED accredited professionals per capita and the number of mechanical engineers with LEED AP accreditation. These factors were combined with the number of Energy Star buildings in each market. The top five markets were Chicago; Denver; Washington, D.C.; Seattle; and San Francisco.
The mandates and incentives category assessed each municipality's commitment to sustainable building through mandates and incentives such as state, county or city laws and ordinances, expedited permitting, and the availability of direct funding. Both mandates and incentives were ranked on separate four-point scales of minimal, basic, moderate, or aggressive. The top five markets were Midtown New York, N.Y.; Downtown New York, N.Y.; Midtown South New York, N.Y.; San Francisco; and Los Angeles.
State energy initiatives examined the effectiveness of state energy policies as measured by the American Council for an Energy-Efficient Economy. The top five CBDs were San Francisco; Oakland, Calif.; Los Angeles; Orange County, Calif; and San Diego.
Green Culture examined a region's cultural attitudes and commitment to sustainable practices, and analyzed data from SustainLane, which ranks a city's performance in 16 different areas. Cushman & Wakefield narrowed these 16 areas to four categories deemed most relevant: green economy, city innovation, transit ridership, and planning and land use. The top five CBDs were Downtown New York, N.Y.; Portland, Ore.; Miami; Boston; and San Francisco.
For more information on the index, visit cushmanwakefield.com or betterbricks.com.