A 2011 study on the political economy of “green” industrial warehouses found that local political ideology plays a role in rent and occupancy levels. The research was funded by NAIOP and looked at 20,000 industrial warehouse properties across the nation. The study authors found that the effect of environmental certification (such as LEED or Energy Star) on rents and occupancy for industrial warehouses was contingent upon local politics. “Green” certified warehouses in politically liberal areas received rent and occupancy premiums, renting for 10% more than their counterparts. However, environmentally certified warehouses in conservative-leaning areas rented for 20% lower and had 25% higher vacancy than non-certified competing properties in the same area.
The results suggest that environmental amenities in real estate are not valued solely for monetary factors, such as their impact on energy bills. Instead, green features in industrial warehouses appear to be valued (or not) just as much for political purposes, marketing, or other factors. The study also highlights the importance of knowing your market. The authors note that the pattern they found may not hold true in other real estate sectors, and that results might change over time as environmental certification programs grow in popularity.
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