2025 Sustainability Trends: New Evolutions in 3rd Party Certifications

Introduction

The second part of our “Future of Sustainable Development: Emerging Trends Series” focuses on third-party sustainability certifications. Sustainability certifications, such as LEED, have a well-documented record of generating long-term value, particularly for Class A office buildings.¹  While these building certifications are not new to commercial real estate, they are helping developers and investors create value and mitigate risk in new and interesting ways.

Certification demand surges for additional product types

One emerging trend is increased demand for certified industrial, mixed-use and multifamily projects. The growth in industrial and retail portions of mixed use can be partially explained by an increase in portfolio-level certifications, such as LEED Volume, which allows owners to apply certification schemes to similar buildings at scale. Since its inception in 2011, LEED Volume has accounted for over 240 million square feet of asset certification by leveraging prototype models that standardize energy and performance goals, accelerate approvals and reduce certification-related fees.²  By reducing uncertainty around cost and timing for completion, developers and investors anticipate a premium at exit. Additionally, increased buyer and tenant interest in sustainable features is driving investors to have more appetite for certifications in multifamily residential buildings.³

Certifying beyond energy efficiency

While third-party certifications have historically been focused on environmental features, newer certifications that focus on human health and digital connectivity are gaining traction. These certifications enhance building differentiation as employers look to bring their workforce back into the office. For digital connectivity, WiredScore is an increasingly in-demand certification that signifies a building’s exceptional digital infrastructure and connectivity. Buildings with WiredScore certification achieve lower vacancies, higher rents and can boost overall GRESB ratings.⁴

Certifications focused on human health and occupant experience, such as WELL and Fitwel, have grown exponentially since the COVID-19 pandemic.⁵  These certifications focus on design and programming features related to indoor air quality, health-related amenities, and building materials, among other topics. On the residential side, tenants prioritize health-related features and amenities. For example, fresh air initiatives were the highest ranked sustainability feature in AMLI Residential’s 2024 Sustainable Living Index Survey.⁶ There are similar occupier demand patterns on the commercial office side – CBRE’s 2024 Occupier Sentiment Survey found that health and well-being certifications influenced 43% of the office real estate decisions.⁷

Certifying resilence

With investors increasingly focused on mitigating climate risks and building resilience into their portfolios, leveraging sustainability certifications can help meet these demands. Investors are incorporating sustainability criteria into their due diligence, they are demanding “brown discounts” for uncertified or low-efficiency assets, or they are avoiding such assets entirely, thereby limiting buyer pools. Additionally, green building certification bodies are adapting their existing processes to place greater emphasis on climate resilience. A prime example is the newest version of LEED, version 5 (v5), which responded to these market signals by including climate risk and resilience elements. LEEDv5 added a new requirement to conduct a climate and natural hazard assessment as well as a new credit for enhanced resilient site design. National Green Building Standard (NGBS) also enhanced its base certification with criteria that recognize notable achievements in Resilience and other environmental factors. The NGBS Green+ RESILIENCE certification, for example, requires design elements that provide 30% increased resilience compared with a standard code-compliant building.

Conclusion

Third-party certifications are a strategic lever for value creation that help to maximize returns and manage risks across real estate portfolios. Trammell Crow Company has committed to certifying every project we complete in collaboration with our investors, designers, consultants, contractors and tenants.

¹CBRE: Green is Good: The Enduring Rent Premium of LEED-Certified U.S. Office Buildings
²USGBC: Using LEED to Build Sustainably at Scale
³NAR Realtor: 2024 REALTORS & Sustainability Report – Residential
⁴Moody’s Analytics: Digital Connectivity and the Evolving Office Sector
⁵Global Wellness Institute: The Number of Wellness-Certified Buildings Explodes
⁶AMLI: Result of AMLI’s 2024 Sustainable Living Index
⁷CBRE: 2024 Americas Office Occupier Sentiment Survey