Private Real Estate Credit: Unlocking green solutions at scale
- SCP Team
- Oct 1
- 2 min read
Updated: Oct 2
Last week at Climate Week NYC, we gathered with industry leaders to explore how integrated financing solutions are shaping the transition to net zero in the built environment. The conversation was candid and forward-looking—and one message was impossible to ignore: sustainability is no longer optional. It is becoming a balance-sheet necessity.
The Brown Discount Is Real
In today’s liquid markets, we are seeing a clear bifurcation at exit. Properties without sustainability features are facing significant retrading, eroding long-term value. Traditional capital often cannot reach many efficiency projects, leaving a financing gap that exposes owners who fail to act. Simply put, ignoring upgrades is no longer a neutral decision—it’s a risk.
Operating Costs: The New Battleground
Rising operating costs are sharpening the divide between high- and low-performing assets.
Electricity demand is projected to rise 15–40% in the next five years.
Insurance premiums for natural disasters are now among the fastest-growing line items.
High-risk properties are being penalized with surcharges, while low-risk assets benefit from discounts.
For owners and investors alike, efficiency upgrades are becoming a decisive factor in managing expenses and protecting NOI.
Tenants Are Driving Decisions
The market is no longer dictated solely by compliance. Tenants are factoring building performance into leasing and utilization choices. Efficiency, resiliency, and sustainability are not “nice to have”—they are competitive differentiators that influence occupancy, rent growth, and tenant retention.
The Value Creation Formula
The financial case for sustainability is stronger than ever:
Revenue side: improved performance attracts and retains tenants.
Cost side: efficiency upgrades and renewables reduce controllable expenses.
Bottom line: sustainable retrofits offer downside protection and create upside opportunities.
Collaboration Is Key
The math is getting clearer: sustainable buildings aren’t just better for the planet—they’re becoming essential for protecting and growing asset value. But capital alone is not enough. Lasting climate impact will require collaboration across financiers, property owners and developers, and technology innovators.
As the built environment faces the combined pressures of regulation, market forces, and climate risk, integrated financing solutions can unlock the upgrades needed to keep properties competitive—and accelerate our collective transition to a low-carbon future.
The slides can be found at this link.
