This article is a must-read if you're looking to do business with commercial real estate property owners and operators who maintain LEED certification for their buildings. We explain what LEED means and how LEED compliance can make or break your business relationship. We'll answer these FAQs about LEED:
What does LEED stand for?
What makes a building LEED certified?
Who issues LEED certification (in the US)?
First, we'll give a quick history of LEED, along with links to resources if you'd like to explore LEED certification. Then we'll explain the benefits of LEED for the commercial real estate industry, and why this matters if you're going to do business with commercial green buildings.
History of LEED Certification
The U.S. Green Building Council (USGBC) is a nonprofit organization that develops, promotes and certifies high-quality green building standards and programs. LEED stands for Leadership in Energy and Environmental Design. Since it was founded in 1993, it has become the standard for green building and sustainability in real estate around the world.
LEED has gone through several updates. Perhaps the most significant addition to LEED was with LEED v4.1, which added cities, communities, and residential dwellings (USGBC announced this on April 2, 2019).
Levels of LEED Certification
There are four levels of LEED certification: Platinum, Gold, Silver, and Bronze. A building can be certified at any level, but to achieve the highest level of certification (PLATINUM), it must score at least 80 points in all eight LEED categories:
Indoor environmental quality
What qualifies for LEED rating?
The USGBC assigns a point system for evaluating buildings based on all eight categories. To qualify for the LEED program, a property has to meet these three criteria:
First, the property must be a permanent structure in a permanent location.
Second, the project must include all contiguous land that's associated with the project and its operations. That includes parking, sidewalks, waste management, water treatment, and landscaping.
Third, the project must comply with LEED size requirements. For example, a LEED ID+C project requires a minimum of 250 square feet.
To qualify for LEED certification, the project goes through a verification process, which evaluates the project based on a point system in those eight LEED categories. A project that earns 40 to 49 points is certified LEED. A project that earns 50 to 59 points is silver, 60 to 79 points is gold, and 80 or more points is platinum.
How long does LEED status last?
According to the Green Building Council, LEEDs certification is valid for three years, but they ask projects to update their data annually to keep their certification active.
How much does LEED certification cost?
See USGBC's LEED certification fees page for the most up-to-date pricing and breakdown by accreditation type.
Benefits of LEED Certification for CRE
There is no one-size-fits-all answer to how LEED benefits CRE, as the benefits and requirements of LEED certification can vary depending on the type of commercial real estate project being undertaken. However, in general, LEED certification signifies that a property meets certain environmental standards.
LEED certification is a voluntary program, and it is the highest recognized level of certification available to green buildings. Building owners and operators choose to opt-in to LEED certification, not only because it reduces carbon emissions, but also because it offers many financial benefits, including:
Reduction in operating costs: Properties that are certified under LEED often require fewer maintenance and repair expenses than non-certified properties. This is because certified buildings typically use more energy-efficient technologies and materials, resulting in reduced energy bills and emissions.
Increased property values and ROI on investments: A property that has been certified under LEED is likely to be more attractive to potential buyers and tenants than comparable properties that have not received such recognition. This is because prospective tenants and buyers will view a property as being environmentally responsible and innovative — two qualities that are likely to be especially appealing in competitive commercial real estate marketplaces.
Increased occupancy and higher rents: Because of lower levels of air pollutants and improved indoor air quality, green buildings tend to attract more tenants and better tenants. Property owners are able to charge higher rents, which also contributes to a higher ROI on CRE investments.
LEED By The Numbers
Achieving LEED certification requires a comprehensive plan that addresses environmental performance, human health and safety, economic feasibility, and innovation. The top 10 states in per capita square footage of LEED certification*:
Massachusetts (3.76 per capital square footage)
New York (3.17)
*This list is based on 2022 figures. The figures on USGBC.org/top-10-leed are updated annually, so if you read this in 2024, the list is likely to have changed for 2023.
More facts about LEED (from the U.S. Green Building Council's 2022 report):
180 countries and territories around the world participate in LEED.
More than 100,000 projects have been certified around the world.
Approximately 2.4 million square feet of real estate is LEED-certified every day around the world.
LEED-certified buildings average 11.1% higher rent (approximately $4.13 per square foot more).
Sales of LEED-certified buildings average 21.4% more per square foot than non-LEED-certified.
Glossary of LEED Terms
LEED NC refers to new construction.
LEED BD+C refers to building design and construction, and it applies to all new commercial buildings, as well as significant renovations to existing buildings. The types of CRE include medical buildings and hospitals, retail centers, warehouses and distribution centers, data centers, hospitality, and schools.
LEED ID+C refers to interior design and construction companies, including new and existing renovations.
LEED O+M applies to building operations and maintenance for buildings that are in operation and not under construction. It can apply to very old buildings that become LEED-certified, as well as new construction projects that have been completed and are operating.
LEED ND is a newer designation for neighborhood developments. It is available for neighborhood development or community development projects that are 75% constructed, or that were fully completed within the last three years.
Doing Business With LEED-Certified Businesses
As a service provider, supplier or vendor, you'll be expected to adhere to certain standards when you do business with LEED-certified properties. This might include:
Delivering goods and supplies in environmentally friendly packaging
Doing business within certain hours to help reduce electricity usage
Using cleaning products that are eco-friendly and nontoxic
Recycling and reducing waste
Reducing water usage
Using renewable energy to power your own facilities
Many industries have their own LEED-accredited programs. These are voluntary, meaning the companies choose to go through rigorous programs to reduce their carbon footprints and become more environmentally friendly.
We'll close out this post with a list of resources for various CRE-related companies:
Green Seal accreditation for cleaning services*
Green Seal certification for hotels
Green Seal program for schools and colleges
All LEED certification programs (BD+C, O+M, ID+C, homes, and ND)
Green Seal differs from LEED certification, but we include those resources here for an important reason. Green Seal applies to products and services, while LEED applies to buildings and property. If you are a vendor seeking to do business with a LEED-certified property, having your products and/or services labeled Green Seal may offer an advantage to doing business with LEED buildings.