Sustainable real estate : An empirical study of the behavioural response of developers and investors to the LEED rating system

• Purpose: The purpose of this paper is to explore the notion of sustainability and research reporting price premiums for LEED-certified buildings. Design/methodology/approach: This paper explores the notion of sustainability and research reporting price premiums for LEED-certified buildings. The durability of certification levels is explored by converting projects developed under the initial NC2-series system to a new vintage rating adopted in 2009. This conversion is made by applying Lagrangian multipliers to model stochastic impacts. Findings: The study reveals that 18 percent of 591 projects developed under the NC2-Series were "misclassified" in terms of certification levels when converted to new NCv2009 standards. To the extent the market has pursued LEED certification levels, the unanticipated changes may have led to the adoption short-term solutions that are inappropriate due to the long-term nature of real estate assets. Research limitations/implications: Given the complexity of the LEED rating system, it is unknown how the market will react to the lack of durability and approach pricing over the long-term. Practical implications: The results indicate market participants should adopt a proactive approach to LEED certification. Originality/value: The study identifies significant dynamics in the LEED certification system for new construction and behavioural responses that have not been reported in the literature.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business (hsv//eng)

Nyckelord

Behaviour

Complexity

Green building

LEED

Real estate

Sustainability

Sustainable development

Publikations- och innehållstyp

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