Environmental Performance of Commercial Real Estate: New Insights into Energy Efficiency Improvements

This paper provides new insights into the performance of commercial real estate – focusing on the environmental performance of institutional assets. We employ a proprietary dataset of energy consumption data that includes more than 26,000 buildings between 2009 and 2018. We document that in our sample of commercial real estate, the median energy intensity decreased by more than 40 percent over the past decade. Using a difference-in-difference analysis, we find that adoption of environmental building certification (LEED) is associated with lower energy consumption, and that there is substantial variation in these effects depending on certification level and program, and label tenure. Moreover, specific interventions aimed at improving the energy efficiency of buildings significantly reduce ex-post energy consumption, with effects varying depending on the local climatic conditions.