Creating Resilience
Sustainability is a Key Factor in Making Office Space Decisions
October 11, 2024 3 Minute Read
Certain sustainability attributes in buildings are now considered so crucial that their absence may lead occupiers to seek discounts or reject a building altogether. CBRE's 2024 Americas Office Occupier Sentiment Survey, published in August 2024, gathered insights from 225 corporate real estate executives responsible for managing office portfolios across the U.S., Canada and Latin America. The survey responses highlight the growing significance of sustainability in office space selection. As occupiers increasingly prioritize sustainability, real estate developers and owners must adapt to these evolving demands.
Driving Forces Behind the Push Toward Sustainable Real Estate:
-
Increasing stakeholder pressure on large corporations to act on sustainability:
A 2024 Deloitte survey found that climate change remains one of the top three priorities for C-suites. Additionally, environmental and social shareholder proposals on climate change have increased significantly over the past decade, reaching an all-time high in 2024. -
Regulatory requirements on building-level compliance and company-wide disclosure of climate risk and greenhouse gas (GHG) emissions:
Compliance and disclosure regulations impacting real estate have increased across the U.S. in the past few years. Thirteen jurisdictions, including cities and states, have either enacted or implemented building performance standards (BPS) for existing commercial buildings, with more than 50 others enacting or implementing benchmarking and transparency policies. BPS regulations require buildings to achieve specific energy efficiency or carbon emissions requirements, with owners subject to fines for noncompliance. Occupiers face the risk of fines added to the lease cost. Occupiers can significantly mitigate this risk by implementing measures to improve energy efficiency and using mechanisms such as green lease clauses to collaborate with the building owner to support carbon emissions reduction measures. -
New disclosure requirements have increased scrutiny on real estate:
2024 saw the passage of the California GHG emissions and climate risk disclosure laws (SB 253 and SB 261), the SEC disclosure regulations and a continuing increase in businesses requiring suppliers to provide data on, and in some cases, commit to reduce, GHG emissions (for example Microsoft, Amazon, Walmart, and Salesforce, among others). For occupiers, real estate is a key component of both Scope 1 and 2 GHG emissions data, which includes emissions from the electricity they buy to power the building, the gas or other onsite fossil fuels used for space and water heating and other real estate-related emissions. -
Growing number of corporate goals and commitments:
Occupiers are responding to these trends by setting ambitious corporate goals, particularly in relation to climate change. Companies making science-based GHG-reduction targets increased by 102% in 2023. CBRE’s occupier survey indicates that over 57% of respondents, including 85% of large companies, have publicly pledged a net-zero emissions goal (see Figure 1).
Figure 1: If you have a public net-zero pledge, what date have you set for achieving that pledge?
What does this mean for real estate occupiers?
CBRE’s findings demonstrate that sustainability is no longer optional but a must-have for many occupiers when making real estate decisions (see Figure 2).
Figure 2: Which of the following environmental and social-related features are a priority in building-selection decisions and how would the presence or absence of these impact your organization's real estate decisions?
Several major sustainability features—notably building certifications, EV charging, and facilities that support walking and cycling—are particularly high-value for occupiers. The majority (55%) say green certification status impacts their decision to occupy a building and what they are willing to pay. In fact, while some respondents will pay a premium for sustainability features, many of these features are so critical for respondents that they would pay less, or reject the building entirely, without attributes such as green certifications (35%) and EV charging (39%).
Sustainability features that are increasingly considered essential can also command a price premium. For example, 17% of respondents indicated a willingness to pay a premium for on-site renewable energy or the usage of smart technology. Additionally, 21% expressed a willingness to pay extra for green building certifications, while 16% would do the same for health and well-being certifications.
Conclusion
CBRE’s 2024 Americas Occupier Sentiment Survey underscores the growing importance of sustainability in commercial real estate. The shifting sustainability landscape—driven by stakeholder pressure, regulatory requirements and corporate commitments—has transformed sustainability considerations from optional to table stakes for office occupiers in the Americas. By incorporating sustainability features such as on-site renewable energy, green-building certifications and EV charging into their properties, investors are best positioned to attract and retain occupiers and realize long-term value.
The shifting sustainability landscape—driven by stakeholder pressure, regulatory requirements and corporate commitments—has transformed sustainability considerations from optional to table stakes for office occupiers in the Americas.
Learn about how CBRE can help accelerate sustainability for your organization here.
Related Insights
-
Explore how 200+ corporate real estate executives in the Americas are thinking about their portfolios, workspaces and sustainability initiatives.
-
Viewpoint | Creating Resilience
U.S. Building Performance Standards in 2023 and Beyond
October 20, 2023
In November 2022, CBRE Econometric Advisors (CBRE EA) published a report outlining how local and state government mandatory regulations are aimed at combating greenhouse gas (GHG) emissions in the real estate sector.
-
CBRE is assisting institutional clients with their green leasing programs and helping find energy efficiencies across their real estate portfolios.
-
Reducing environmental impact is an urgent priority for companies across the world.
Related Services
- Transform Business Outcomes
Sustainability Solutions
Accelerate sustainability with CBRE. Transform your real estate assets and achieve your sustainability aspirations with our innovative solutions.
- Transform Business Outcomes
Consulting
Gain comprehensive guidance on insightful, executable real estate strategies for both investors and occupiers.
