The Impact of Eco-labeling’s Effect on Boston’s Commercial Office Market

Michael Decker Colby College

This Version: May 21, 2018

Abstract

The city of Boston and Mayor Marty Walsh have made it a priority to change Boston and make it a greener city. His ambition for change has Boston becoming carbon neutral by 2050, becoming the first city to do so. Part of this vision has come from the significant increase in green building in Boston over the past two decades. What is the impact of green labels on building rents and vacancy rates? This paper finds that there is a 13 to 16 percent rental premium for eco-labeled (LEED and Energy Star) buildings in Boston. There is, however, no evidence of an occupancy premium for green buildings in the city.

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1. Introduction

The city of Boston and Mayor Marty Walsh have made it a priority to change Boston and

make it a greener city. In his vision, his ambition for change has Boston becoming “the first city

in the nation to require a green building standard through municipal zoning requirements,” along

with making Boston carbon neutral by 2050 (Boston Planning & Development Agency 2004).

The change in building requirements shows his desire to make Boston a sustainable, green city.

Even though the city of Boston has made a push towards green buildings, along with most large

United States cities, only 10.8% of commercial buildings are ‘green qualified,’ accounting for

34.1% square feet of buildings. This small feat still has Boston with 7.3% fewer ‘green qualified’

buildings and 31.9% less square feet of green buildings compared to Chicago, which ranked first

in CBRE’s National Green Building Adoption Index for 2017.

As Boston continues moving towards being the greenest city in the country, how much

do green buildings affect the commercial real estate market? Rental, occupancy, and sales

premiums have been associated with green buildings throughout the past few decades. Many

economists have studied this eco-labeling, but most have focused on the commercial market

across the entire United States. My research will focus on the impact of eco-labeling on Boston’s

rental rates and vacancy rates. I will use Boston’s commercial market as a specific example, as

no other research has used one specific city to understand the premiums with green building.

Using one specific city will allow me to understand differences within the different submarkets

across the city, as well the specific Boston market than looking at all United States cities. Also,

Boston’s initiatives make it an important real estate market to study. Understanding the

premiums at the micro level within Boston will provide developers and local government

officials with information to make better business decisions for future commercial buildings,

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along with what type of eco-labeling will be more beneficial for buildings with specific

characteristics. Green buildings help reduce energy costs, along with creating healthier work

environments, which in turn will increase employee productivity and happiness. This can help

tenants also understand what the premiums on eco-labeled buildings are, helping them make

better business decisions when looking for office space to rent. Thus, we expect that green

buildings will have higher rental rates and lower vacancy rates compared to non-ecolabeled

buildings.

Section 2 below provides a historical background on green building and the different

certification types. In section 3, I discuss the previous works of literature to better understand the

process of eco-labeling and the significance of green building, both from an environmental and

an economic stance. Section 4 outlines the data and methodology used to construct tests on the

rental and occupancy premiums. Section 5 will present the results from the data, and section 6 is

a brief conclusion.

2. Background of Eco-labeling

Green building and sustainability have become standardized throughout the real estate

development and building world over the past two decades. Two main groups support and

promote green building—Energy Star and the U.S. Green Building Council (USGBC). Energy

Star began in 1992 as a government-backed symbol for energy efficiency. The symbol has been

placed on products, homes, buildings, and industrial plants to help consumers and businesses

make informed decisions on energy use (“Energy Star Overview” 2017). Similar to Energy

Star’s goal to create a more energy efficient world, three men—Rick Fedrizzi, David Gottfried,

and Mike Italiano—had a vision to create a group that would support and promote sustainability-

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focused practices in the building industry. Their support for the cause led them to establish the

USGBC in 1993, where they brought companies and corporations together to create a greener

world and more sustainable buildings everywhere. As they continued to create a more

sustainable building culture in the United States, the three men began the LEED green building

rating in 2000 to certify buildings for using these environmentally sound techniques (“About

USGBC” 2017).

Both organizations have continued to grow, especially in the commercial building

market. By 2016, Energy Star has grown to have over 29,500 commercial buildings earning the

label throughout the United States (“About Energy Star for Commercial Buildings” 2017). The

USGBC has also continued to grow since 2000 to now form a community that, as of May 2016,

supports over 80,000 projects across 162 countries. Between Energy Star and LEED, 38% of

commercial office space has been ‘green qualified’ in the United States’ 30 largest markets,

increasing from 5% in 2005 (Gunby 2017).

For Energy Star labeling, commercial buildings are scored on the EPA’s 1-100 Energy

Star score, which measures the energy performance for each building. The buildings rated in the

top twenty-five percent of their market receive the Energy Star label for that year. These

buildings throughout the United States have led in energy efficiency and are known to use, on

average, 35% less energy than their counterparts (“About Energy Star for Commercial

Buildings” 2017). Energy Star ranks all buildings annually, so buildings can lose their labeling

after a year and receive the label again the following year. LEED Certification, on the other

hand, has an application process that each project or building submits and receives a score for the

project on different categories, which can be seen in Figure 1. Each category consists of specific,

creditable objectives that help lead to more energy efficient and environmentally friendly

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buildings, such as site management policies, indoor water use reduction, and minimum indoor air

quality performance. The building’s score will then certify them at four different distinctions—

certified, silver, gold, or platinum. Also, LEED now supports projects under five different

distinctions—building design and construction, interior design and construction, building

operations and maintenance, neighborhood development, and homes (“LEED is green building”

2017). Unlike Energy Star, once a building receives its LEED certification, the USGBC does not

have a decertification process, so the building will remain certified in the future.

FIGURE 1. LEED credit categories that can be earned in during the certification process.1 The commercial real estate firm CBRE recently created a study rating United States’

cities based on how green their commercial buildings were from a LEED and Energy Star stance.

Across the 30 largest United States office markets, Energy Star buildings account for 10.3% or

563 million square feet of commercial space, and buildings with LEED certification account for

4.7% of commercial buildings or 161 million square feet. Even with the increases in green

buildings, 62% of the United States office space still remains non-certified. From a total number

of buildings in the 30 top markets, 526 buildings have LEED certification or 1%, 2,403 or 7%

are Energy Star labeled, and 31,077 or 88% are non-certified (CBRE and Maastricht University

2017). 1 Figure 1 comes from Neoli 2017.

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Boston continues to make advancements in its green building market, as it ranked

fourteenth on the list. Table 1 shows that 10.8% of Boston’s buildings are ‘green qualified’,

accounting for 34.1% square feet of buildings as of 2017. Of this group, 3.8% have LEED

certification, accounting for 15.3% square feet of total office space. Of the buildings with LEED

certification, 2.8% are existing buildings, 0.8% are new construction, and 0.2% are core and

shell.

Table 1. Descriptive statistics of Energy Star labeled and LEED certified buildings in Boston.2

Boston buildings saw a 27% increase in LEED certified buildings and an 11% increase in

Energy Star buildings since the annual CRBE study conducted in 2016 (CBRE and Maastricht

University 2017). The city continues to grow its green building market, as Boston has moved up

seven spots in the past two years, where they ranked twenty-first in the 2015 index. Figure 2

presents two graphs showing this increase of both LEED certification and Energy Star

designation since 2005 throughout all of Boston. The significant increases seen in the graphs are

due to Boston’s use of the energy and water benchmarking ordinance, which was passed in 2013.

The ordinance requires commercial buildings to annually measure, benchmark, and publish their

performances (Gunby 2017). Mayor Walsh and the city of Boston continue moving towards the

2 Table 1 comes from the CBRE and Maastricht University study “National Green Building Adoption Index 2017.”

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carbon neutral goal with the help of many prevalent development, real estate, and construction

companies, as many buildings continue to be built throughout Boston.

FIGURE 2. Graphs of percent certified number of buildings and square feet of buildings in Boston. The left graph is of the LEED certified buildings. The right graph is of the Energy Star labeled buildings.3 3. Literature Review

This study looks at the eco-labeling of commercial buildings and the multiple premiums

associated with LEED certification and Energy Star labels in Boston. Most of the studies in the

United States have looked at multiple cities, such as the Wiley et. al. (2010) study that looks at

43 office markets. This article draws on finding similar, yet non-certified commercial buildings

near the eco-labeled buildings to help account for the locational aspect and better understand

where the premiums come from. Eichholtz et. al. (2010) uses GIS to create a 0.2-mile radius

around each eco-labeled building to create a control group. Unlike these other studies, I will

present data on only Boston’s commercial market, which will allow me to use surrounding

buildings as the control group in my research. Also, using one city will allow for the control of

differences between city office markets seen in previous studies.

3 Figure 2 comes from the CBRE and Maastricht University study “National Green Building Adoption Index 2017.”

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Of the many studies, most find that Energy Star labeling has a statistically significant

rental premium on commercial buildings, but the controversy over whether LEED buildings have

such a premium remains a question. Fuerst and McAllister (2011) found that there was a 3-5%

rental premia for LEED or Energy Star eco-labels, but their results for occupancy rates showed

that they could not confirm an occupancy premium for LEED buildings and only a small,

positive premium for Energy Star buildings. Their study uses a sample of 197 LEED and 834

Energy Star buildings, throughout the United States, along with over 15,000 control buildings.

Eichholtz et. al. (2010) use a sample of 694 rents and 199 sale prices of eco-labeled

buildings from 2004 to 2007. As mentioned earlier, their study uses GIS to account for the

locational variables, and they find no significant rental premium for LEED certified buildings

and a 3.3% rental premium for Energy Star buildings. Their premiums are much lower than

many other studies, which could be due to preciseness in locational controls. . Also, previous

research uses hedonic regressions looking at building data from a specific year or a few years.

My research uses panel data over a 15-year period, allowing me to control for market trends over

many years and the economic downturn after the 2008 regression.

Many studies have looked at other aspects of eco-labeling, such as Kats (2003), which

studies the construction cost premium. Kats found a 2% construction premium for these

buildings, which in turn considers another question that has not received a lot of study—the

profitability of eco-labeled buildings. Many companies consider the environmental effects of

having sustainable buildings, but they have trouble accounting for the monetary benefits of eco-

labeling. The work in this study will help understand these monetary benefits in Boston and the

effect that eco-labeling has for their buildings. However, with the consistent growth of buildings

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with LEED certification and Energy Star labeling, it seems developers and investors have been

trending towards building eco-labeled buildings throughout the United States.

4. Data and Methods

Since the early 2000s, eco-labeled buildings have become more common throughout the

Boston market. As mentioned earlier in the study, every building has the opportunity to apply for

LEED certification, along with also recertifying their building at the same level or moving to a

higher level. The Energy Star label is awarded to the top quartile of buildings each year based on

their energy performance.

The Boston office market, as of quarter 3 in 2017, consists of 1,513 buildings and 112.5

million total rental building area (RBA) square feet in Boston/Suffolk County, and 439 buildings

and 32.4 million total RBA in Cambridge, according to the CoStar database. This study draws on

the Class A office buildings in four distinct submarkets of the overall market—Back Bay,

Cambridge, the Financial District, and Seaport, which consist of 26, 115, 58, and 10 commercial

office properties, respectively. Of the 209 total buildings, 69 buildings have LEED certification

and 66 buildings have been Energy Star labeled. Figure 4 shows a map of the ‘green qualified’

buildings across the four submarkets. Energy Star labeling is awarded annually, so buildings

within the study could have some years where they are awarded the label, while other years they

are not. LEED certifications are awarded after the building applies for the certification and has

passed the inspection of accreditation. Buildings keep this certification for consecutive years.

Similar to Eichholtz et al. (2010) and Fuerst and McAllister (2011), discrepancies were found

between properties listed as having LEED certification and being Energy Star labeled by CoStar

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and the data from the US Green Building Council and Energy Star, causing this study to draw

upon the lists from the US Green Building Council and Energy Star.

FIGURE 3. Map of Boston and Cambridge with both the submarkets and LEED and Energy Star labeled buildings marked, as of 2017. Blue circles represent Energy Star, green circles represent LEED, and grey circles represent buildings that are no longer certified.4 This study focuses on direct rents per square foot and total vacancy rates, from quarter 3

of 2002 through quarter 3 of 2017. Some buildings within the study were constructed after 2002,

and their data runs from the initial quarter after construction through quarter 3 of 2017. It also

needs to be noted that many rental rates were disclosed for certain buildings, causing the

observations of rental rates to be lower than the number of observations and buildings viewed in

vacancy rates.

Table 2 shows summary statistics for the subcategories of the vacancy rate, rental rate,

building size, stories, and year built. The vacancy rates are between 4.5% and 12.9% vacant. As

expected, the mean of the LEED Certified buildings, at 10.23%, is lower than the non-eco-

labeled average of 11.58%, but the Energy Star Labeled buildings have a higher vacancy rate at

12.85%. All of the rental rates per square foot show that the direct rents range from $43.26 to 4 Figure 3 comes from the CBRE and Maastricht University study “National Green Building Adoption Index 2017.”

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$56.47. All eco-labeled buildings show that the rental rates per square foot are higher than the

non-eco-labeled market average of $43.26. Also, buildings with higher LEED certifications,

certified to platinum, see an increase in the average rental rate as well. The building sizes also

shows that LEED and Energy Star buildings are much larger than non-eco-labeled buildings,

with LEED and Energy Star around 540,000 square feet, while the non-eco-labeled buildings

average is around 221,000 square feet. When looking at non-eco-labeled buildings, the rental rate

and sales price are both lower than the overall average, at $43.26 and $581.87, respectively. The

vacancy rate for non-eco-labeled buildings is roughly the same as the overall average, showing

that vacancy rates within all buildings seem to be relatively the same. The raw data suggest that

the rental rates and sales prices will see premiums for eco-labeled buildings over the non-eco-

labeled buildings, while the vacancy rates are very similar throughout the market. The next

section will focus on controlling for buildings and market effects to better understand what the

premium is.

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Table 2 Summary Statistics OVERALL VacancyRate Rent$psf SIZE(sqft) STORIES YEARBUILTMean 0.1156 45.77 335,286.9 13.27 1982.31

Std.Dev. 0.1850 12.16 305,139.5 11.13 28.33Obs. N=10877,n=209 N=5362,n=207 n=205 n=203 n=203LEED

Mean 0.1023 54.66 540,898.3 20.57 1983.42Std.Dev. 0.1674 10.09 352,526.2 12.93 25.11Obs. N=1543,n=69 N=876,n=50 n=68 n=69 n=69

ENERGYSTAR Mean 0.1285 52.73 540,174.5 21.98 1981.74

Std.Dev. 0.1373 10.08 335,966.4 12.44 17.33Obs. N=1356,n=66 N=1026n=55 n=42 n=42 n=42

CERTIFIED Mean 0.0757 53.61 171,556.7 7.33 1992.33

Std.Dev. 0.1260 8.55 80,493.9 2.31 4.16Obs. N=200,n=6 N=90,n=3 n=3 n=3 n=3SILVER

Mean 0.1073 54.03 554,242.4 25.11 1986.78Std.Dev. 0.1151 9.62 288,211.7 12.70 6.85Obs. N=300,n=15 N=233,n=14 n=9 n=9 n=9GOLD

Mean 0.1231 55.64 542,376 20.20 1981.57Std.Dev. 0.1874 10.28 358,368 13.19 28.53Obs. N=712,n=46 N=464,n=34 n=44 n=44 n=44

PLATINUM Mean 0.0454 56.47 691,254.3 25.30 1988.10

Std.Dev. 0.0887 4.52 367,832.2 11.80 26.49Obs. N=148,n=10 N=46,n=7 n=9 n=10 n=10

NON-ECO-LABELED Mean 0.1158 43.26 221,010.4 8.82 1981.85

Std.Dev. 0.1914 11.85 221,507.3 7.66 30.75Obs. N=8596,n=205 N=3952,n=155 N=122 N=119 N=119

a. Methods

Within the study, I conduct regressions to understand the rental, vacancy, and sales

premiums that eco-labeling has on Boston commercial buildings. Regressions for the average

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direct rent per square foot and total vacancy use fixed-effects regressions. The fixed-effects

regressions are based on the following equation:

𝑌!" = 𝛽! + 𝛽!𝐿𝐸𝐸𝐷!" + 𝛽!𝐸𝑆𝑡𝑎𝑟!" + 𝛽!𝑏𝑢𝑖𝑙𝑑𝑖𝑛𝑔! + 𝛽!𝑞𝑢𝑎𝑟𝑡𝑒𝑟! + 𝜀!" (1)

Where Yit is the average direct rent per square foot and total vacancy in a given building

for building i at time t, LEEDit is the building with LEED certification i at time t, EStarit is the

Energy Star labeled building i at time t, buildingi captures all time-invariant building

characteristics, quartert are quarter indicators, and 𝜀!" is the error term for the ith building at time

t. The rental rate and vacancy rate equations use robust standard errors, which account for

heteroskedasticity. As mentioned above, the sample consists of 209 commercial buildings,

covering up to 61 quarters. There are 66 Energy Star buildings and 77 buildings with LEED

certification using 61 time variants. The Energy Star indicator equals 1 for each of the four

quarters of a year the building was labeled and equals 0 for years the building was not Energy

Star labeled. The LEED indicator equals 1 during the quarter that the building was certified and

remains 1 through quarter 3 of 2017.

5. Results 5.1 Rental Rates

Table 3 shows the results for rent per square foot. Using variations of equation 1 in the

Methods section we can see that the data seems to be consistent with many of the other studies

conducted. The direct rent regressions show very significant results. The regression looking at all

of the submarkets shows that there is a rental premium per square foot of $6.04 for LEED

buildings, $5.17 for Energy Star, and the most significant increase in rental rates comes when the

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building is both LEED Certified and Energy Star labeled at $7.29 per square foot. All three of

the variables are significant at the 1% level of significance. Within the four submarkets,

Cambridge shows the largest LEED rental premium at $16.10 per square foot and is significant

at the 1% level, while the Financial District sees a $3.38 rental premium. This larger premium

could be due to the life science and biotech companies in Cambridge making the eco-labeled

buildings more sought after, as well as how high the demand for space in Cambridge is,

especially the Kendall Square area. The Energy Star variable sees a smaller rental premium

overall than LEED. Cambridge has a $10.30 rental premium, while the Seaport only has a $1.67

premium, and all variables are significant at the 1% level. The LEED and Energy Star variable is

only seen for the total market because the number of observations is too small that

multicollinearity was a problem within the submarkets.

Also, looking at the results from the four different LEED certification groups in Table 4,

LEED Certified shows the smallest rental premium of $3.22, while LEED Platinum has a $12.09

per square foot rental premium. This is expected as LEED Platinum is the highest level of

certification, having the best environmentally sustainable building materials, areas throughout

the building, and energy efficient design. The large difference between the observations in direct

rent and vacancy rate comes from the amount of rental rates that have been disclosed by the

owners of the building. Appendix A shows that when taking the natural log of the direct rents, all

variables show positive coefficients and are statistically significant at the 1% level. These tests

are consistent with the panel regressions seen in Tables 3 and 4.

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Table 3 Fixed-effect regression results of direct rents across the four submarkets.

DirectRentpersq.ft.Results (1) (2) (3) (4) (5)VARIABLES Total BackBay Cambridge FinancialDistrict Seaport LEED 6.035*** 10.942*** 16.098*** 3.377*** 4.861*

(1.331) (3.044) (3.413) (1.214) (1.978)

EnergyStar 5.174*** 6.861*** 10.298*** 4.094*** 1.667***

(0.769) (1.668) (2.216) (0.897) (0.000)

LEEDandEnergyStar 7.292***

(1.723)

Constant 43.790*** 43.737*** 40.743*** 45.256*** 47.606***

(0.276) (0.596) (0.354) (0.289) (0.996)

Observations 5,362 894 1,676 2,659 133Numberofbuildings 157 23 72 56 6R-squared 0.090 0.163 0.146 0.078 0.145Robuststandarderrorsinparentheses***p<0.01,**p<0.05,*p<0.1 Table 4 Fixed-effect regression results of direct rents and vacancy rate across the four LEED certification levels.

LEEDCertificationLevelsResults (1) (2)VARIABLES TotalDirectRent TotalVacancyRate LEEDCertified 3.224*** 0.006

(1.152) (0.023)

LEEDSilver 8.291*** -0.030

(1.994) (0.028)

LEEDGold 8.216*** -0.020

(1.958) (0.024)

LEEDPlatinum 12.092*** -0.053

(1.764) (0.035)

Constant 44.537*** 0.118***

(0.207) (0.002)

Observations 5,362 10,877Numberofbuildings 157 209R-squared 0.065 0.002Robuststandarderrorsinparentheses***p<0.01,**p<0.05,*p<0.1

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5.2 Vacancy Rates

Total vacancy sees a much different result than the direct rents. None of the coefficients

are statistically significant as seen in Table 5. While most of the coefficients for LEED are

negative, as expected, Back Bay shows a positive coefficient, but only a 0.7% increase.

Similarly, for Energy Star, the Financial District and Seaport see a positive coefficient, but only

with a 0.7% and 0.9% increase, respectively. Also, see Appendix B for natural log regression

results on vacancy rates. The reason that the greatest effect seen on total vacancy is only a 6.9%

decrease for Energy Star could be caused by all of the buildings used in the study being class A

buildings. The demand for the best office space in Boston is high, regardless if the buildings are

eco-labeled or not, making them all highly sought after. While some buildings may see slight

increases in vacancy when a large firm leaves its building, most firms stay in Boston, causing the

overall absorption in Boston to stay relatively constant.

Table 5 Selected fixed-effect, panel regression results of vacancy rates across the four submarkets.

VacancyRateResults (1) (2) (3) (4) (5)VARIABLES Total BackBay Cambridge FinancialDistrict Seaport LEED -0.021 0.007 -0.062* -0.005 -0.040

(0.016) (0.015) (0.036) (0.025) (0.041)

EnergyStar -0.006 -0.000 -0.069** 0.007 0.009

(0.014) (0.020) (0.031) (0.021) (0.016)

LEEDAndEnergyStar -0.013

(0.019)

Constant 0.119*** 0.114*** 0.113*** 0.138*** 0.081***

(0.003) (0.006) (0.003) (0.006) (0.018)

Observations 10,877 1,448 5,879 3,240 310Numberofbuildings 209 26 115 58 10R-squared 0.001 0.000 0.044 0.000 0.044Robuststandarderrorsinparentheses***p<0.01,**p<0.05,*p<0.1

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6. Conclusion Understanding the positive effects of green building, from both an environmental and

economic stance, will help Boston continue its pursuit to becoming carbon neutral by 2050.

Environmentally, buildings with LEED certification and Energy Star labels help reduce the

carbon footprint through a decrease in greenhouse gas emissions and increase the energy

efficiency of buildings. Economically, green buildings help reduce energy costs that tenants and

landlords pay, along with giving healthier work environments for employees to increase

productivity and happiness among workers. While tenants may pay a higher premium for these

office spaces, they reduce their energy, electricity, and heating and cooling costs to make up for

these premiums.

Focusing on a specific market and using panel data allowed for contributions to previous

research on rental and occupancy premiums of commercial offices. The results and findings

within this study show similarities to previous work, such as the insignificant occupancy

premiums that were also found by Fuerst and McAllister (2011), but also show some

advancements. The rental premiums of 13.20%-16.26% are consistent but higher than those

found in previous findings. Using data across a fifteen-year period allowed the data to pick up

the major fluctuations in the economy and fully understand what is occurring within the Boston

market.

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Acknowledgments I would like to thank Jim Siodla and Samara Gunter for their guidance throughout the research and making this project possible. I would also like to thank Aaron Jodka and the research team at Colliers International- Boston for their help retrieving the data for this paper. Lastly, I appreciate the support and feedback I have received from my thesis classmates and five roommates throughout the year.

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References Boston Planning & Development Agency. 2004. “E+ Green Building Program.”

https://www.cityofboston.gov/eeos/buildings/

CBRE and Maastricht University. 2017. “National Green Building Adoption Index 2017.” https://www.cbre.com/about/media-center/chicago-named-nations-greenest-city-in-cbre-study

Eichholtz, Piet, Nils Kok, and John M. Quigley. 2010. “The Economics of Green Buildings.” University of California, Berkeley Program on Housing and Urban Policy Working Paper No. W10-003.

Eichholtz, Piet, Nils Kok, and John M. Quigley. 2010. “Doing Well by Doing Good? Green Office Buildings. The American Economic Review, 100(5), 2492–2509.

Energy Star. 2017 “Energy Star Overview.” https://www.energytar.gov/about

Energy Star. 2017. “About Energy Star for Commercial Buildings.” https://www.energystar.gov/about/origins_mission/energy_star_overview/about_energy_star_commercial_buildings

Fuerst, Franz and Patrick M. McAllister. 2011. “Eco-labeling in commercial office markets: Do LEED and Energy Star offices obtain multiple premiums?” Ecological Economics, 70(6), 1220-1230.

Gunby, Jennifer. 2017. “2017 National Green Building Adoption Index releases data on growth.”

U.S. Green Building Council. https://www.usgbc.org/articles/2017-national-green-building-adoption-index-releases-data-growth

Kats, Gregory H. 2003. “Green Building Costs and Financial Benefits.” Capital E., 1-9.

Neoli 2017 U.S. Green Building Council. 2017. “About USGBC.” https://www.usgbc.org/about U.S. Green Building Council. 2017. “LEED is green building.” https://www.usgbc.org/leed

Wiley, Jonathan A., Justin D. Benefield,, and Ken H. Johnson. 2010. “Green Design and the Market for Commercial Office Space.” The Journal of Real Estate Finance and Economics, 41(2), 228–243.

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Appendix Appendix A. Natural log direct rent regressions.

NaturalLogDirectRent(persq.ft.)Results (1) (2) (3) (4) (5)VARIABLES Total BackBay Cambridge FinancialDistrict Seaport LEED 0.124*** 0.197*** 0.328*** 0.076*** 0.098*

(0.026) (0.055) (0.067) (0.025) (0.043)

EnergyStar 0.115*** 0.145*** 0.222*** 0.092*** 0.026***

(0.016) (0.036) (0.038) (0.019) (0.000)

LEEDandEnergyStar 0.147*** (0.033)

Constant 3.746*** 3.756*** 3.663*** 3.784*** 3.847***

(0.005) (0.012) (0.007) (0.006) (0.022)

Observations 5,361 894 1,675 2,659 133Numberofid 157 23 72 56 6R-squared 0.086 0.132 0.121 0.090 0.116Robuststandarderrorsinparentheses***p<0.01,**p<0.05,*p<0.1 Appendix B. Natural log vacancy rate regressions.

NaturalLogVacancyRateResults (1) (2) (3) (4) (5)VARIABLES Total BackBay Cambridge FinancialDistrict Seaport LEED -0.064 -0.093 -0.458 0.075 -0.569

(0.129) (0.189) (0.296) (0.171) (0.532)

EnergyStar 0.064 -0.037 -0.412** 0.163 -0.191***

(0.109) (0.181) (0.159) (0.154) (0.000)

LEEDandEnergyStar -0.039 (0.130)

Constant -2.015*** -2.219*** -1.540*** -2.263*** -2.246***

(0.024) (0.048) (0.023) (0.040) (0.271)

Observations 5,934 1,001 2,038 2,744 151Numberofid 165 23 80 56 6R-squared 0.001 0.001 0.024 0.007 0.058Robuststandarderrorsinparentheses***p<0.01,**p<0.05,*p<0.1