Beyond building certification: The impact of environmental interventions on commercial real estate operations
Avis Devine and
Energy Economics, 2021, vol. 93, issue C
We extend the commonly-studied definition of investment in sustainable and energy efficient real estate beyond environmental building certification to include three additional types of environmentally-focused building interventions: environmentally-focused capital expenditure (capex); monitoring; and, tenant engagement. Appealing to behavioral economics and finance theory, we test for a connection between changes in tenant and property management behavior and electricity consumption. Through a partnership with a global institutional investment manager, this study examines ten years of asset-level operating statement and electricity consumption data in Canadian and U.S. office buildings, measuring both the initial impact of such interventions as well as any adjustments observed over time. Analysis of the proprietary intervention data allows us to better understand the impact of varied environmental interventions on the electricity consumption of commercial real estate. We find that all four intervention categories, including building certification, are associated with decreased electricity consumption, with tenant engagement providing an immediate decrease that is maintained over time. Environmentally-focused capex is also associated with decreased electricity consumption in both Canada and the U.S. Taken together the results indicate that utility consumption and its associated costs are only minimized when multiple environmental interventions are implemented.
Keywords: Commercial real estate; Energy efficiency; Tenant engagement; Green building certification; Capital expenditures; Monitoring (search for similar items in EconPapers)
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