The Influence of Trees and Landscaping on Rental Rates at Office Buildings (NA-99-0412)

This research project investigates the effect of trees and landscaping on office rental rates.

The environmental and economic benefits of trees have been studiedrelative to a variety of interests including their influence on realestate value. This study investigates the effect of trees andlandscaping on office rental rates, based on a comparison of 85 officebuildings that comprise 270 individual and unique leases in theCleveland-metropolitan area. Data that describes the quantity,functionality and quality of landscaping was gathered from each of thebuildings including landscape maturity,percent ground cover (trees,turf, pavement, etc.) and functional attributes (building shade, noisebuffer, space definition, recreation, visual screen and aesthetics).

Multiple regression analysis in the form of a hedonic equation wasconducted to isolate the economic effects of landscaping. Officeattribute data including lease information, physical attributes, anddistance variables were used to calibrate the basic model andlandscaping data were added to the hedonic equation to determine ifindividual and/or interactive variables had any effect on contractedrental rates. The individual analysis of the variables showed a strongpositive effect for those buildings with good landscaping aestheticsand building shade provided by trees. Conversely,landscaping thatprovides a good visual screen produced significant negative impacts onrental rates.

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