Income, Value, and Returns in Socially Responsible Office Properties

Abstract

"Responsible property investing" seeks to address social and environmental issues while achieving acceptable financial returns. It includes strategies such as investing in properties that are ENERGY STAR labeled, close to transit, and located in redevelopment areas. This study examines the financial performance of these types of properties. With few exceptions, over the past 10 years they had net operating incomes, market values, price appreciation, and total returns that were higher or the same as conventional properties, with lower cap rates. The findings reveal that responsible property investing can be practiced without diluting returns and can potentially yield higher profits for developers and investors.