Sustainability is increasingly viewed as more than a tool for compliance and risk management. It is becoming a business strategy that supports operational efficiency, tenant satisfaction and long-term asset performance. Today, as commercial real estate owners navigate evolving tenant expectations, operating costs and climate-related considerations, sustainability is steadily being evaluated alongside traditional business metrics such as occupancy, asset performance and long-term value creation.

KBS is committed to incorporating sustainable business practices. To explore these evolving priorities, KBS recently hosted a sustainability roundtable at its Newport Beach headquarters. Moderated by Apaulo Malloy, KBS’ ESG manager, the discussion brought together commercial real estate leaders from across the country, including representatives from Kilroy Realty Corporation, Cushman & Wakefield and White Oak Partners. The discussion examined how commercial real estate leaders are balancing sustainability goals with financial performance and how environmental considerations are influencing investment, operational and ownership decisions.

Moving Beyond Risk Mitigation

A recurring theme throughout this discussion was that sustainability initiatives should not be viewed solely through the lens of risk management. Industry leaders emphasized that sustainability can also create value by enhancing tenant experiences, improving operational efficiency and supporting long-term asset performance.

“The conversation around sustainability shouldn’t be limited to risk mitigation,” said Vaishali Sampat, vice president of sustainability at Kilroy Realty. “There are opportunities to create value, strengthen tenant relationships and help properties remain competitive over the long term.”

Navigating Climate Risk in a Changing Insurance Environment

As climate-related risks continue to influence investment and ownership decisions, insurance considerations are becoming a more prominent component of due diligence. Megan White, director of sustainability advisory at Cushman & Wakefield, noted that owners are increasingly evaluating how climate exposures may affect insurance availability, coverage strategies and long-term asset resilience.

“Climate considerations are increasingly influencing how owners assess risk and protect assets,” White said. “As insurance markets continue to evolve, understanding a property’s exposure to climate-related risks is becoming an important part of investment and ownership decision-making.”

The discussion also highlighted the importance of maintaining accurate property valuations to ensure adequate insurance coverage. Sampat added that while lower coverage levels may reduce premiums in the short term, they can create significant financial exposure when unexpected events occur.

EV Charging Creates Value Beyond Sustainability

Electric vehicle (EV) charging was among the most discussed sustainability investments during the roundtable. Participants noted growing demand for charging infrastructure across office, retail and multifamily properties as tenants and residents increasingly expect access to EV charging options.

“In multifamily housing, EV charging options have become an increasingly important amenity,” said Somalia Jones, manager, responsible investment policy and practices, White Oak Partners. “As electric vehicle adoption grows, some residents view charging availability as a factor in their housing decisions.”

The group emphasized that EV charging can deliver benefits beyond sustainability objectives. Sampat noted that charging infrastructure may help properties remain competitive while supporting evolving tenant preferences.

“Features such as EV charging stations can serve as both a sustainability initiative and a tenant amenity,” Sampat said. “As demand continues to grow, they can help properties remain attractive to current and prospective tenants.”

For owners and investors, the value proposition extends beyond tenant satisfaction. Stephanie Ascher, vice president, investment management and portfolio at KBS, noted that successful projects often require communicating both the operational and financial benefits of EV infrastructure.

“For investors, the discussion centers on economics and asset value,” she said. “For tenants, the focus is on convenience, experience and meeting evolving expectations.”

At the same time, participants noted that implementation can present challenges. Ruth Ostrreicher, manager of sustainability advisory at Cushman & Wakefield, explained that lease structures at some retail properties require owners to obtain tenant approvals before installing charging stations, adding complexity to project planning and execution.

Solar Investments Support Long-Term Value Creation

Solar energy was another area of significant discussion during the roundtable. Participants highlighted solar installations and solar carports as opportunities to reduce operating costs, advance sustainability objectives and potentially create long-term value for property owners.

“For many owners, solar installations and solar carports represent an opportunity to support sustainability goals while also delivering long-term economic benefits,” said Sampat.

Attendees agreed that owners are increasingly evaluating renewable energy investments through both operational and financial lenses. In addition to supporting sustainability initiatives, solar projects may help offset operating expenses and contribute to a property’s long-term competitiveness.

“Owners are exploring investments such as solar power and EV charging infrastructure not only to support sustainability efforts, but also to identify solutions that make economic sense over the long term,” said White.

At the same time, participants noted that the financial case for solar varies by market, property type and ownership strategy. While solar investments may offer meaningful long-term benefits, owners must carefully evaluate implementation costs, projected savings and payback periods when determining whether a project aligns with their investment objectives.

Balancing Sustainability and Economics

While roundtable participants identified numerous opportunities to improve operations, enhance tenant experiences and support long-term asset performance, they agreed that successful sustainability initiatives must also make economic sense.

“Finding the right balance between sustainability initiatives and economic performance remains one of the industry’s biggest challenges,” said White. “Owners and investors continue to evaluate how environmental considerations can be incorporated into decision-making without compromising returns.”

Ultimately, the discussion highlighted that sustainability is increasingly becoming part of broader investment and ownership strategies, with organizations evaluating opportunities through both operational and financial lenses.