The market for green commercial office space in California is characterized by low but increasing availability and rising demand. Principal market drivers include significant increases in federal, state and local green building policies, goals and mandates; increased attention and awareness by corporate leaders; reduced costs of green technologies and measures; growing expertise within the construction and architectural design industries; improved knowledge and value of certification standards; and reduced operating costs. However, of the 1.3 billion square feet of California commercial office space, today only 10% is presently ENERGY STAR rated, and less than 1% is LEED® certified.
Source: CoStar Market Data, April 2009
1. 'Other' denotes smaller commercial office markets in California including Marin/Sonoma, Salinas, Bakersfield, San Luis Obispo/Paso Robles, Stockton/Modesto, Santa Barbara/Santa Maria/Goleta, Fresno, and Santa Cruz/Watsonville.
This is changing. The rate of construction of green buildings within the commercial sector has accelerated. According to global real estate investment company RREEF, the number of LEED® projects has been growing over the past 3 years at a compound annual growth rate of 50-100%.1 In the period 2006-2007, the multi-tenant commercial sector has grown to represent 13.8% of LEED® buildings, up from just 1% of all LEED® buildings during the years 2000-2003.2
1 RREEF – “The Greening of US Investment Real Estate, Market Fundamentals, Prospects and Opportunities”, November 2007.
2 McGraw Hill - "2009 Green Outlook: Trends Driving Change", November 2008.