Living walls are a growing trend globally, as a new approach to bring more nature to crowded cities while offering attractive economic returns for property owners. Vertical gardens 1) enhance a property’s curb appeal and 2) provide considerable energy efficiency gains. In this blog post, we explore the estimated ROI of a standard living wall installation, basing assumptions on a hotel in Manhattan and scientific literature.
ROI of Living Green Walls for a Manhattan Hotel: A Case Study
The following is an estimated breakdown of the costs and returns from a living green wall installed at a hypothetical hotel in NYC:
Green Haven Hotel, a boutique hotel located in the heart of Manhattan’s Midtown neighborhood, decided to install a living green wall to enhance its aesthetic appeal, promote sustainability, and improve guest experience. This case study compares upfront costs and maintenance expenses, with long-term energy efficiency savings and increased property value.
1. Project Overview
- Wall Size: 250 sq. ft.
- Design Goal: To create a visual focal point in the lobby while improving indoor air quality and energy efficiency.
2. Initial Costs
A. Cost Breakdown
| Item | Cost |
| Design and Planning | $5,000 |
| Living Wall System | |
| – Plants and Materials | $20,000 |
| – Structural Support | $10,000 |
| – Irrigation System | $2,500 |
| – Lighting System | $1,500 |
| Installation Labor | $25,000 |
| Total Initial Investment | $64,000 |
Notes:
- This price accurately reflects Eco Brooklyn’s costs for a 250 SF wall
- Automated irrigation keeps plants healthy and vibrant, reducing the need for on-site maintenance.
3. Maintenance Expenses
A. Annual Maintenance Costs
| Item | Cost |
| Monthly Maintenance Visits | $4,200 |
| Seasonal Plant Replacement | $600 |
| Irrigation System Maintenance | $300 |
| Total Annual Maintenance | $5,100 |
Notes:
- Monthly maintenance includes pruning, fertilizing, and checking the irrigation system.
- Seasonal plant replacement is only necessary for plants that need it.
4. Energy Savings
A. Baseline Energy Consumption
- Pre-Installation Energy Costs:
- Monthly HVAC Costs: $8,000
- Annual HVAC Costs: $96,000
B. Post-Installation Energy Savings
- Energy Savings:
- HVAC Cost Reduction: Living green walls provide insulation and natural temperature regulation [1]. According to studies, this temperature regulation results in at least 15% reduction in HVAC costs based on the average energy savings reported in literature [2][3].
- Monthly HVAC Savings: $1,200
- Annual HVAC Savings: $14,400
C. Cumulative Energy Savings Over 5 Years
| Year | Annual Savings |
| Year 1 | $14,400 |
| Year 2 | $14,400 |
| Year 3 | $14,400 |
| Year 4 | $14,400 |
| Year 5 | $14,400 |
| Total Savings | $72,000 |
5. Increased Revenue
Studies show that 70% of travelers prefer hotels with “sustainability credentials” [6] and installing a green wall in the reception area or on the facade of a hotel conveys sustainable design. Also, according to a study by Des Rosiers et al., green walls can enhance property values by 6-15% [4]. As a result, property owners will not only benefit from a higher resale value, but also increased revenue per customer.
For Green Haven Hotel, if we assume each room is $300 per night, and average occupancy rate is 75%, which is standard for NYC hotels, then the yearly revenue from booking amounts to $8,212,500. Assuming a 1% increase in occupancy rate due to the installation of the living wall and the enhanced customer experience that leads to more recurring stays, the hotel would see an extra $109,500 in annual revenue. This would amount to an increase in revenue of $547,500 over 5 years, even if the cost per room remained the same.
6. Return on Investment (ROI)
A. Calculating ROI
- Total Initial Investment: $64,000
- Total Cumulative Energy Savings Over 5 Years: $72,000
- Total Maintenance Costs Over 5 Years: $25,500 (5 years x $5100)
- Increase in Revenue over 5 Years: $547,500
Net $ Earned = Total Savings + Increased Revenue – Total Maintenance Costs
Net $ Earned = $72,000 + $547,500 – $25,500 = $594,000
B. ROI Calculation
ROI = ((Net $ Earned – Initial Investment)/Initial Investment) x 100
ROI = (($594,000 – $64,000)/$64,000) x 100 = 828.125%
Conclusion
Investing in a living green wall can offer significant returns for property owners and developers. In this analysis, the installation of a living green wall at Green Haven Hotel not only provided significant aesthetic and environmental benefits but also resulted in substantial energy savings and happier guests!
- Key Outcomes:
- ROI of over 8x over 5 years demonstrates the financial viability of such sustainable investments.
- Indoor gardens have a calming effect that can increase guest experiences and ultimately, increase customer loyalty and recurring stays.
- Properties with green walls can attract more buyers and customers, leading to higher real estate value, occupancy rates, and rental prices.
This analysis highlights the advantages of integrating living green walls into commercial properties. As urban areas continue to grow, the demand for sustainable and eco-conscious design solutions will rise. Living green walls provide an innovative way to meet these demands while delivering significant economic benefits.
Add The Green Advantage to Your Building!
At Eco Brooklyn, we specialize in providing cost-effective installation and maintenance services for living walls in commercial and residential properties. Our best-in-class living walls are designed to last for years with minimal maintenance, and our affordable maintenance packages further enhance the ROI of the living wall for building owners and developers. Contact us today to get a custom quote for your property and see the value in green infrastructure!
Notes
On the value: In a 2014 article, the New York Post quoted a representative from Douglas Elliman, a luxury real estate firm in NYC, “Adding a vertical garden can boost the value of a property by 10 to 15 percent at a minimum” [7]
References
[1] Liu, H., Wang, Q., & Zhang, Y. (2023). Impact of green walls on building energy performance: A comprehensive review. Green Energy & Environment, 8(4), 1152-1174. https://doi.org/10.1016/j.nbsj.2023.100070
[2] Pérez, G., Coma, J., Martorell, I., & Cabeza, L. F. (2014). Vertical Greenery Systems (VGS) for energy saving in buildings: A review. Renewable and Sustainable Energy Reviews, 39, 9-165. https://doi.org/10.1016/j.rser.2014.07.055
[3] Lau, N., Wang, R., & Giridharan, R. (2022). Effect of green wall installation on urban heat island and building energy use: A climate-informed systematic literature review. Journal of Cleaner Production, 351, 131570. https://doi.org/10.1016/j.rser.2022.112100
[4] Des Rosiers, F., Thériault, M., Kestens, Y., & Villeneuve, P. (2002). Landscaping and house values: An empirical investigation. Journal of Real Estate Research, 23(1-2), 139-161. Retrieved from https://www.researchgate.net/publication/5142154_Landscaping_and_House_Values_An_Empirical_Investigation
[5] Sijmons, J. P. (2018, October 8). Reconnecting people with nature: Green walls. Colorado Real Estate Journal. Retrieved from https://crej.com/news/reconnecting-people-with-nature-green-walls/
[6] Guerin, G. (2012, December 3). Sustainable stays: How green hotel design improves occupancy and operations. Hotel Executive. https://www.hotelexecutive.com/feature_focus/5957/sustainable-stays-how-green-hotel-design-improves-occupancy-and-operations
[7] New York Post. (2014, June 10). Vertical gardens add a green touch to luxe NYC, Miami spots. https://nypost.com/2014/06/10/vertical-gardens-add-a-green-touch-to-luxe-nyc-miami-spots/