Despite a growing appreciation for green-building certifications, developers and owners have continued to question the return on investment from sustainability-based real estate investment strategies. While numerous studies over the past decade have found green-building certifications such as LEED and Energy Star enhance buildings’ financial performance, the validity of the data has been questioned. As a result, owners have been reluctant to base capital expenditures on those findings.

We are seeing some of that reluctance evaporate in the face of a new, in-depth study conducted by a pair of noted academic research leaders: Nils Kok, Ph.D., associate professor of finance and real estate at Maastricht University in the Netherlands, and Avis Devine, Ph.D., assistant professor in real estate finance and housing at the University of Guelph in Canada.

The study, published September 2015 in the Journal of Portfolio Management, shows the impact of green certificati