Yahoo Finance This city has the most green office space
Chicago is home to the most green office space in the U.S. It’s the third year in a row that the city is ranked No. 1, one study found.
Over 70% of the Windy City’s office space is eco-friendly certified, compared to the country’s average of 42%, according to a study by Los Angeles-based firm CBRE, the Netherlands’s Maastricht University and Ontario’s University of Guelph. Chicago outranked San Francisco, which clocked in No. 2 with 67.5% certified buildings, followed by Atlanta with 59%. Last year, Chicago, was at top with 69.8% green buildings compared to 41.9% nationally.
Chicago’s LEED and EPA certification rates are no surprise: The city has undergone massive construction initiatives, as green development became the new standard, especially in Chicago, said Linda Kozloski, creative design director of Chicago-based development company Lendlease.
“In Chicago, the city does a good job of mandating some form of green building… It has always been a progressive city… Because of that, it is not something new that’s been pushed onto developers but has been layered into the code for some time now,” said Mark Heffron, chief development officer and managing partner at Chicago’s CEDARst Development.
The city has encouraged a commitment to green development, with its Climate Action Plan, now about a decade old. It has expedited the permit process for developers building eco-friendly projects, a move committed to achieving the goals of the Paris Agreement as well as a commitment to use 100% renewable energy in municipal facilities by 2025.
In general, Chicago office development has doubled in the past two years, according to Chicago-based Cushman & Wakefield, with 7.4 million square feet currently under construction in the Windy City. That number is only outpaced by New York City and Washington, D.C. in 2019, according to a report by JLL, a Chicago-based commercial real estate firm.
“Chicago has built a lot, but the only reason they are No. 1 is that they are converting the older products,” said Spencer Levy, chairman of Americas Research and senior economic advisor for CBRE. But the study did not specify how much of the green office space in Chicago was actually new or retrofitted.
The push to retrofit old office buildings has been a move to attract and retain tenants. With more than 1,440 green buildings and 167 million square feet of rentable green space, the city saw its strongest office leasing activity in a decade this year, drawing high-profile clients like Walgreens, Uber Technologies, Accenture, CBOE, Federal Home Loan Bank of Chicago, Glassdoor, WeWork and Amazon in 2019, according to real estate firm Cushman & Wakefield.
“Chicago is home to a multitude of major companies and as a result, many residents, sustainability is critical for the city’s growth,” said Peter McEneaney, vice president of New York-based investment firm Thor Equities, an investor 800 Fulton West Market, one of Chicago’s largest office projects.
There’s eco-friendly condos and apartments, too
Residential buildings have only a fraction of green certifications compared to office spaces — 3.3% nationally. Even so, Chicago has almost double the national rate of green apartment and condo buildings, at 5.9%, the CBRE survey found.
Corporate green initiatives drive office leasing decisions to reduce their carbon footprint but that isn’t the case for residential landlords, said Heffron.
“Almost all the new stock is green. But the older stuff is not being retrofit because landlords are not seeing the rent bump benefit as much as in office space,” said Levy.
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.
More from Sarah:
Bing Crosby’s palatial Nevada ranch can be yours for $7.3 million
