An exploration of ecolabels and operating financial metrics: A first look at the multifamily rental sector
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 12 December 2019
Issue publication date: 18 October 2020
Abstract
Purpose
As the green economic bottom line is a strong motivating force when deciding to build, manage and/or operate green, this study aims to examine the financial impacts of green certifications on multifamily rental communities.
Design/methodology/approach
Using a multiple regression methodology, operating financial variables are examined.
Findings
Multifamily rental green buildings garner not only higher rental collections but also higher total expenses. When applying these higher rates to properties, the overall increase in rents outweighs the increases in total expenses.
Originality/value
While multiple studies have focused on the office sector, this study begins to fill the literature gap within the multifamily rental sector regarding the economic impacts of green-certified buildings. The outcomes of this study have positive implications for the multifamily real estate industry by providing developers, owners, managers and related parties with a better understanding of the financial impacts of multifamily rental green buildings; however, more research is needed.
Keywords
Acknowledgements
The authors thank Todd Feist, Sustainability Program Manager at The Institute of Real Estate Management (IREM®) for his assistance with this research project. Sincere appreciation is also expressed to Yardi and IREM® for the grant awarded to support this research and the two property management companies for sharing their data as well as Thomas Metzger for his helpful recommendations.
Citation
Hopkins, E.A. and Van Mullekom, J.H. (2020), "An exploration of ecolabels and operating financial metrics: A first look at the multifamily rental sector", International Journal of Housing Markets and Analysis, Vol. 13 No. 5, pp. 869-886. https://doi.org/10.1108/IJHMA-08-2019-0088
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited