LEED: Value of a Market Signal
The final day of Greenbuild 2013 closed with a talk from Nate Silver, an American statistician and #1 best selling author of “The Signal and the Noise”. One take-away message was how ‘signals’ have economic value and can serve as a window into goals, values and intentions. Signaling is an important construct of a functioning market economy, as signals work to facilitate the efficient exchange of goods and services.
LEED certification sends a strong signal to the real estate market. As the dominant language of green building, a LEED rating communicates important aspects of a building. This communication capability adds a significant value dimension to the real estate equation at every point of an asset’s lifecycle.
Two leading academics at Georgia Institute of Technology analyzed the relative importance LEED plays in communicating market signals. Released in early 2014, their economic-based analysis identifies the strong signaling value of a LEED rating given the rating system’s tiered recognition structure. Their findings illustrate the value of LEED certification within the real estate market, and how the pursuit of a LEED rating stimulates building owners to attain more LEED credits and achieve higher levels of LEED certification.