Drivers of Investment in Commercial Real Estate Sustainability: 2006–2018

We investigate the factors (“drivers”) that motivated investment in energy efficiency in commercial real estate office buildings over the 2006–2011 and 2012–2017 period, and looking forward from 2018 in the context of growing concern over carbon emissions around the world. These insights were collected from large Canadian asset managers through interviews conducted in 2017 and 2018. Key findings were that (1) organizations noted an increasing number of factors driving investment decisions over the three periods; (2) cost drivers (payback period and anticipated financial returns) were the top two drivers in 2006–2017; (3) public relations factors became significantly more important looking forward, with brand (reputational impact) as the top-ranked driver and tenant attraction tied for third place; and (4) mitigation against risks such as resilience and anticipated compliance consistently increased in importance. This study contributes to a comprehensive understanding of past, present, and near-future sustainable real estate investment priorities, changing owner behaviors, and the perceived business case for building energy efficiency investments.

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Modeling the Decision-making of Real Estate Developers in the Building Energy Efficiency (BEE) Market- A Game Theoretical Model from Transaction Costs Perspective

10.3390/wsf-00731 ◽

2011 ◽

Author(s):

Queena K. Qian ◽

Edwin H. W. Chan

Keyword(s):

Decision Making ◽

Energy Efficiency ◽

Theoretical Model ◽

Real Estate ◽

Transaction Costs ◽

Building Energy ◽

Building Energy Efficiency ◽

Game Theoretical Model ◽

Real Estate Developers

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FINDING EVIDENCE OF GREEN LEASING IN UNITED STATES GOVERNMENT-LEASED PROPERTIES

Journal of Green Building ◽

10.3992/1943-4618.15.1.55 ◽

2020 ◽

Vol 15 (1) ◽

pp. 55-72

Author(s):

Eunhwa Yang ◽

Juan Sebastian Guevara-Ramirez ◽

Catherine Bisson

Keyword(s):

United States ◽

Energy Efficiency ◽

Building Energy ◽

The United States ◽

Commercial Real Estate ◽

United States Government ◽

Building Energy Efficiency ◽

Legal Provisions ◽

The U.S ◽

Building Owner

ABSTRACT Although the term “green leasing” is not yet well defined, its primary purpose is clear. With an aim to create a collaborative environment through legal provisions between a building owner and a tenant, green leasing may ultimately help resolve the energy paradox in tenanted properties. Issues surrounding split-incentives are driven by a mismatch between owners' capital expenditures on improving building energy efficiency and an uncertainty of tenant or occupant behavior that might affect a building's energy consumption. Though some countries have started to develop guidelines promoting the adoption of green leasing, especially in government buildings and commercial real estate, implementation has not been overly successful globally. This study has two focuses, the first of which is to compare green leasing guidelines from various countries and to suggest six comprehensive categories of green leasing components: management relationships, information sharing, certificates, legal stipulations, financial factors, and operation. The second core area of research places government-tenanted properties' lease agreement contracts. The goal is to find any evidence in a legal condition between a building owner and a tenant, in this case federal government, to improve building energy efficiency with less environmental impact in the United States. The findings of the study indicated 41 out of 400 leases had green clauses. Three out of six categories proposed in this study were found in the U.S. government-tenanted properties, while the other three types were not shown. The findings of this study also suggest categories of green leasing clauses can contribute to defining green leasing and provide empirical evidence of green leasing in governmenttenanted properties. Ultimately, this study produces arguments for possible reasoning behind the employment of some green lease categories but the lack of use of others, specifically in the U.S. office market and government-tenanted buildings.

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How transaction costs affect real estate developers entering into the building energy efficiency (BEE) market?

Habitat International ◽

10.1016/j.habitatint.2011.12.005 ◽

2013 ◽

Vol 37 ◽

pp. 138-147 ◽

Cited By ~ 17

Author(s):

Queena K. Qian ◽

Edwin H.W. Chan ◽

Lennon H.T. Choy

Keyword(s):

Energy Efficiency ◽

Real Estate ◽

Transaction Costs ◽

Building Energy ◽

Building Energy Efficiency ◽

Real Estate Developers

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REAL ESTATE DEVELOPERS' CONCERNS ABOUT UNCERTAINTY IN BUILDING ENERGY EFFICIENCY (BEE) INVESTMENT—A TRANSACTION COSTS (TCS) PERSPECTIVE

Journal of Green Building ◽

10.3992/jgb.7.4.116 ◽

2012 ◽

Vol 7 (4) ◽

pp. 116-129 ◽

Cited By ~ 8

Author(s):

Queena K. Qian ◽

Edwin H.W. Chan ◽

Lennon HT Choy

Keyword(s):

Energy Efficiency ◽

Real Estate ◽

Transaction Costs ◽

Large Scale ◽

Energy Use ◽

Transaction Cost Economics ◽

Building Energy ◽

Building Energy Efficiency ◽

Economic Market ◽

Real Estate Developers

Buildings account for 40% of global energy consumption and nearly one-third of global CO2emissions; and the resulting carbon footprint significantly exceeds that of all forms of transportation combined. Attractive opportunities exist to reduce buildings' energy use at lower costs and higher returns than in other sectors. This paper analyzes the concerns of uncertainty, in terms of transaction costs, to the real estate developers when they make decisions about investing in Building Energy Efficiency (BEE). To solicit views of developers regarding BEE investment, in-depth interviews were conducted with 15 executives and architects who work in big real estate development firms covering 80% of real estate activities in Hong Kong. This research applies transaction cost economics (TCE) to study the underlying reasons resulting from uncertainty that cause market reluctance to accept BEE by choice. It provides a detailed analysis of the current situation and future prospects for BEE adoption through studying the impacts from three aspects: economic, market and policy uncertainties. It delineates the market and suggests possible policy solutions to overcome the uncertainties and to attain the large-scale deployment of energy-efficient building techniques. The findings establish the groundwork for future studies on how to choose a particular policy package and what roles government should play to solve the existing problems in BEE development.

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