2023 Winter Issue - 45

lot of ongoing work on physical risk assessments
and transition risk assessments and thinking longer
term. If I'm an asset manager and my fund life is
seven years, previously I may only have been worried
about the next seven years. But now, more
people are considering what happens beyond that
because if you need to sell the asset, you need to
present a case to the buyer that the asset will meet
building performance standards.
What other significant trends do
you see?
RAH: Of all the natural disasters that are happening,
over 90 percent are water related-not just
flooding, but also wildfires because they have a lot
to do with groundwater depletion and dry vegetation.
Water is a finite resource we need to survive,
and the viability of the real estate market depends
on it. You can't have a thriving real estate market in
places where people don't want to live. So we need
to talk more about water security. The Lake Mead
reservoir and Hoover Dam, for example, supply
not only water to about 25 million people, but also
hydropower, and the drought has been shrinking
the lake at an alarming rate. As we approach 2030,
the real estate industry has to think about things in
a more systemic, interconnected way, and water is
a big part of it.
BROOKE: The discussion about embodied carbon
in relation to retrofits versus new construction is
still in the early stages in Asia Pacific in comparison
to Europe. Another issue is whether insurance is
a sufficient risk mitigation tool, and the answer is,
probably not. Insurers are already requiring a lot
more detail around physical risk assessment and
transition risk assessment so that we avoid having
stranded assets in the future. Similarly, the capital
markets will be even more focused on which transactions
and assets they will be financing.
JODKA: There is some concern about the push for
electrification, whether for vehicles or buildings,
in terms of the energy grid's capacity. Do we have
the system in place today that can allow for this?
I've heard conflicting answers from experts. There's
likely to be a need for heavy government investment
in our energy grid to make sure we can handle the
future of energy use. It's clear that ESG policies are
very important to large real estate occupiers. They
are willing to pay a rent premium to occupy buildings
that meet their standards. There are going to
be great opportunities to retrofit buildings and add
tremendous value. And some assets will outperform
because of their ability to measure and display their
energy use and meet the investment criteria of pension
funds and other institutional capital sources.
Other assets won't check enough boxes and will be
less attractive to these investors.
WALRAVEN: While the internet of things, artificial
intelligence, and other new technologies have
transformed and will continue to transform efforts
around climate risk mitigation and ESG outcomes,
people still play a critical role. People need to make
decisions, approve, implement, and engage to get
the best possible outcomes with lower overall risk.
Presently, demand for good ESG talent is exceeding
the supply. We joke that in the real estate community,
in particular, there's a bit of musical chairs
going on, where great folks are getting " new opportunities "
and moving to new companies at every
level of ESG roles. What the real estate, ESG, and
educational communities need to continue to work
at improving is growing good talent to fill these
roles. UL
RON NYREN is a freelance architecture, urban planning, and real
estate writer based in the San Francisco Bay area.
WINTER 2023
URBAN LAND
43
Developed by MP
Boston and designed to
achieve LEED Platinum
certification, Winthrop
Center incorporates a
highly insulated facade,
an airtight exterior
envelope, and an
advanced energy recovery
ventilation system in its
office spaces. In addition,
the building includes
317 luxury residences
designed to achieve LEED
Gold certification.
MP BOSTON
2023 Winter Issue

Table of Contents for the Digital Edition of 2023 Winter Issue
