Why ENERGY STAR® Certification Is Becoming a Competitive Advantage for Building Owners
Updated: Aug 31
For years, energy efficiency was often viewed as an operational expense reduction strategy: use less energy, lower utility bills, and improve building performance.
Today, leading building owners are looking at energy performance differently.
A high-performing building is no longer just cheaper to operate. It can be more valuable, more attractive to tenants, easier to finance, and better positioned in an increasingly competitive real estate market.
That is why more commercial real estate owners across Canada and the United States are pursuing ENERGY STAR® Certification.
Recognized by the U.S. Environmental Protection Agency, ENERGY STAR certification provides independent recognition that a building performs among the top energy-efficient buildings in the country based on actual energy data and operational performance.
But the value extends far beyond recognition.
ENERGY STAR certification can become a strategic asset management tool that helps owners demonstrate performance, strengthen tenant appeal, and protect long-term property value.
1. ENERGY STAR® Certified Buildings Can Command Higher Property Values
Commercial real estate value is closely tied to operating performance.
Because energy-efficient buildings typically achieve lower operating costs, they can generate stronger net operating income (NOI), which is one of the primary drivers of valuation.
Research has consistently shown that buildings with recognized energy performance certifications can achieve measurable financial premiums.
A study published in the Journal of Real Estate Finance and Economics found that ENERGY STAR-labeled buildings achieved higher rents and sale price premiums compared with comparable non-certified properties. The research found that ENERGY STAR certification was associated with a higher transaction price premium, demonstrating that the market recognizes the value of verified energy performance.
(Source: Eichholtz, P., Kok, N., & Quigley, J. M. “The Economics of Green Building.” Review of Economics and Statistics, 2010.)
Additional research examining commercial property transactions has identified sale price premiums ranging from approximately 1% to more than 30% depending on property type, market conditions, and certification level.
(Source: Fuerst, F., & McAllister, P. “Green Noise or Green Value? Measuring the Effects of Environmental Certification on Office Values.” Real Estate Economics, 2011.)
For building owners, the message is clear:
Energy performance can translate into asset performance.
2. ENERGY STAR® Certified Buildings Attract More Tenants and Higher Rents
Tenant expectations are changing.
Organizations increasingly want office and commercial spaces that support sustainability objectives, employee wellbeing, and corporate ESG commitments.
Certified buildings can stand out in competitive leasing markets because they provide independent verification of strong operational performance.
Studies have shown that ENERGY STAR-certified properties often experience:
Higher occupancy rates
Lower vacancy risk
Stronger tenant demand
Rental premiums compared with similar non-certified buildings
Research has found rental premiums ranging from approximately 3% to 16%, while some studies have identified occupancy advantages of up to 10% higher compared with comparable buildings.
(Source: Eichholtz, P., Kok, N., & Quigley, J. M. “Doing Well by Doing Good? Green Office Buildings.” American Economic Review, 2010.)
A certification provides tenants with something increasingly valuable:
confidence that the building’s sustainability claims are measurable and independently verified.
3. ENERGY STAR® Certification Opens the Door to Federal Leasing Opportunities
For owners seeking government tenants, ENERGY STAR certification may be more than a competitive advantage. It can be a requirement.
Under Executive Order 13514, federal agencies were directed to prioritize energy-efficient buildings and lease space in buildings meeting ENERGY STAR performance criteria.
While federal leasing requirements have evolved over time through subsequent policies and directives, ENERGY STAR remains a widely recognized benchmark for demonstrating building energy performance.
For owners targeting government agencies or organizations with strict sustainability requirements, certification can help improve market eligibility.
4. ENERGY STAR® Certified Buildings May Benefit From Better Financing Opportunities
Financial markets are increasingly paying attention to building performance.
Energy-efficient buildings often demonstrate:
Lower operating costs
Reduced exposure to energy price volatility
Better operational management
Lower perceived risk
Research examining green-certified commercial properties has found evidence of improved financial performance and reduced default risk.
Studies of commercial mortgages have shown that properties with recognized sustainability certifications, including ENERGY STAR, may benefit from more favorable lending conditions, including lower interest rates.
Some research has identified financing advantages of approximately 30 to 35 basis points for certified buildings compared with similar non-certified properties.
(Source: An, X., & Pivo, G. “Green Buildings in Commercial Mortgage Portfolios: Risk and Performance.” Journal of Sustainable Real Estate, 2020.)
For owners and investors, energy performance is increasingly becoming part of the broader risk assessment process.
ENERGY STAR® Certification Is More Than a Certificate. It Is a Business Strategy.
Today’s successful building owners are managing assets with a long-term perspective.
Energy performance affects:
✔ Operating costs
✔ Tenant attraction and retention
✔ Asset valuation
✔ Financing opportunities
✔ Regulatory readiness
✔ Market differentiation
ENERGY STAR certification provides independent validation that a building is performing at a high level — and gives owners a credible way to communicate that performance.
Whether you own an office building, condominium, apartment building, industrial property, or another eligible asset, certification can help transform energy efficiency from an operational initiative into a measurable business advantage.
Turn Energy Performance Into Asset Value
ENERGY STAR® Certification can do more than recognize a building’s energy performance. It can help building owners demonstrate operational excellence, strengthen market positioning, and support the long-term value of their assets.
But achieving certification requires more than simply having strong energy performance. The process involves accurate benchmarking, eligibility assessment, documentation, and submission through ENERGY STAR® Portfolio Manager.
Zenith Net-Zero helps building owners manage the certification process from eligibility assessment through submission, making it easier to turn measured building performance into recognized performance.
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