By Tony Liou, Founder and President of Partner Energy | Published Jan. 27, 2025 on GlobeSt.com
Transition Risks Can Impact Property Valuation and Should Be Incorporated in Underwriting
In 2025 and beyond, not only must CRE owners and investors deal with physical climate risks like wildfires and hurricanes, but they also need to manage the transition risks that come with the shift toward a low-carbon economy. Transition Risks are business-related risks due to government regulations and disclosure rules around how properties impact the environment.
Current regulations and potential future ones, such as local ordinances like NYC’s Local Law 97 which enforce greenhouse gas emissions reduction targets, are aiming to minimize the impact that buildings have on the environment. Property owners must comply with these regulations by their deadlines or face hefty fines, and assets can become stranded if they do not adhere to these energy efficiency standards.
In this Globe St. article, Tony Liou, Founder and President of Partner Energy discuss how Transition Risks can impact property valuation and should be incorporated in underwriting.
