Trees Boost Rental Rates at Office Buildings

By Robert J. Laverne and Kimberly Winson-Geideman
(September 2003)- The environmental and economic benefits of trees have been studied relative to a variety of interests including their influence on real estate value. This study investigates the effect of trees and landscaping on office rental rates, based on a comparison of 85 office buildings that comprise 270 individual and unique leases in the Cleveland metropolitan area.

Data that describe the quantity, functionality, and quality of landscaping were gathered from each of the buildings including landscape maturity, the percentage of ground cover (trees, turf, pavement, etc.), and functional attributes (building shade, noise buffer, space definition, recreation, visual screen, and aesthetics).
Multiple regression analysis in the form of a hedonic equation was conducted to isolate the economic effects of landscaping. Office attribute data including lease information, physical attributes, and distance variables were used to calibrate the basic model, and landscaping data were added to the hedonic equation to determine if individual and/or interactive variables had any effect on contracted rental rates.
The individual analysis of the variables showed a strong positive effect for those buildings with good landscaping aesthetics and building shade provided by trees. Conversely, landscaping that provides a good visual screen produced significant negative impacts on rental rates.
Related Resources:
Trees and Rental Rates (PDF)
Journal of Arboriculture