The Effects of Multiple Green Factors
on Condominium Prices
Published online: 26 April 2014
Springer Science+Business Media New York 2014
Abstract This paper analyzes the transaction prices of green buildings assessed
on the basis of multiple green factors. Our theoretical model demonstrates that
the initial green premium can be negative but becomes positive as the building
ages if a green building has a higher life-cycle cost and a longer economic life.
Our empirical analysis of green condominiums in Tokyo confirms this predic-
tion. We additionally find that the longer-life design is associated with a price
premium, but the use of renewable energy and recycled materials and water is
associated with price discounts. The price discounts are interpreted as the
capitalization of a greater life-cycle user cost.
Residential real estate
Green buildings are buildings with superior environmental performance. Because
approximately 40 % of total CO
emissions are generated by real estate in many
countries, interest in energy-efficient buildings has increased in recent years.
green factors are not limited to energy efficiency. Major green labels define green
buildings using various sustainability factors such as resource efficiency and indoor
environmental quality. For example, the Leadership in Energy and Environmental
J Real Estate Finan Econ (2015) 50:412–437
For example, see Architectural Institute of Japan (2000).
J. Yoshida (*)
The Pennsylvania State University, 368 Business Building, University Park, PA 16802, USA
Tokyo Association of Real Estate Appraisers, 1-1 Ichigaya Motomura-ChoShinjukuTokyo 162-0845,