How Sustainability is Powering Performance in a High-Interest Market

As interest rates remain elevated and real estate returns face pressure, asset managers are turning to a powerful ally: sustainability.

In our recent webinar with GRESB, leading voices from PGIM, BGO, and GRESB itself explored how sustainability is moving from a “nice-to-have” to a business-critical capability.

Sustainability isn’t just about ESG ratings anymore – it’s about performance. From cutting operational costs and avoiding fines to improving tenant retention and enhancing liquidity, ESG factors are now central to value creation.

The session highlighted the growing sophistication in how managers approach ESG – starting at acquisition, integrating climate risk modelling, and tailoring strategies to local market materiality. Regulations like Local Law 97 are accelerating the shift, but also creating complexity. And while “green premiums” are elusive, the risk of “brown discounts” is increasingly real.

Post-COVID, the social dimension of sustainability is gaining momentum. Health, wellbeing, and quality of space are directly influencing tenant demand – and obsolescence risk.

Importantly, GRESB’s new lender assessment signals that the debt community is stepping up too, helping borrowers navigate the sustainability transition.

The verdict? Sustainability is no longer a separate track – it’s baked into the fundamentals. And with high-quality data, smarter regulation, and cross-sector collaboration, the industry is poised to go further, faster.

Missed the webinar? Contact us to explore how sustainability strategies are delivering results for our clients.