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Contrary to the traditional technology project perspective, real estate investors see building-specific renewable energy (on-site energy) investments as part of the property and as something affecting the property’s ability to produce a (net) cash flow. This paper aims to show the value-influencing mechanism of on-site energy production from a professional property investors’ perspective.

The value-influencing mechanism is presented with a case study of a prime logistics property located in the Helsinki metropolitan area, Finland. The case study results are compared with the results of a survey answered by over 70 property valuation professionals in the Finnish real estate market.

Current valuation practice supports the presented value-creation mechanism based on the capitalisation of the savings generated by a building’s own energy production. Valuation professionals see benefits beyond decreased operating expenses such as enhanced image and better saleability. However, valuers acted more conservatively than expected when transferring these additional benefits to the cash flows of the case property.

Because the savings in operating expenses can be capitalised into the property value, property investors should consider on-site energy production when the return of on-site energy exceeds the return of the property. This enhances the profitability of on-site energy, especially in urban areas with low initial yields.

This is the first research paper to open the value-influencing mechanism of on-site energy production from a professional property investors’ perspective in commercial properties and to confirm it from a market study.

New ways of working challenge workplace management: increasing mobility and diminishing organizational boundaries require re-evaluation of both workplace design and service delivery. However, structures and processes of workplace management are still traditional, and managers, together with outsourced facility service providers, often do not succeed at fulfilling the needs of mobile employees. The aforementioned changes stimulate discussions in many areas in both industry and academy. Nevertheless, workplace literature from business perspective seems to be scarce. In this paper, the focus is on workplace service offering for mobile knowledge workers. This paper aims to study the current state of workplace servitization. To answer this, the authors identify value offering elements that are used in office business market to deliver workplace as a service.

This study follows multiple case study methodology including five case studies. Primary data were collected through interviews with workplace service providers. Secondary data included observations and publicly available data. The authors took business model design approach to study selected business offerings.

The results indicate that workplace business models include elements of servitization on various levels. Physical space is no longer the central offering in the office business; instead, it acts as a component on which the service portfolio is built. The highest value from workplace comes from experience-related service offerings.

Academically, research contributes to the workplace management studies by providing servitization perspective to a topic previously approached with a more technical and psychological point of view. This study can also support service providers and customer organizations in their quest to make service provision more flexible and experience-oriented.

Retail properties are a perfect example of a property class where revenues determine the rent for the property owners. Estimating the value of new retail developments is challenging, as the initial revenues can have a significant variance from the long-term revenue levels. Owners and tenants try to manage this problem by introducing different kind of options, such as overage rent and extension rights, to the lease contracts. The purpose of this paper is to value these options through time for different types of retailers, using real-life data with a method that can be easily applied in practice.

This paper builds upon the existing papers on real option studies but has a strong practical focus, which has been identified as a challenge in the field. The paper presents simple mathematical equations for valuing overage rent and extension options. The equations capture the value related to uncertainty (volatility) that is missed by standard valuation practices.

The results indicate that overage and extension options can represent a significant proportion of retail lease contract’s value and their value is heavily time-dependent. The option values differ greatly between tenants, as the volatilities can have a large spread across tenants. The paper suggests that the applicability of option pricing theory and calculus should not be considered as an insurmountable barrier any more, rather a greater challenge for the practical adaptability of the method can be the availability of real-life data that is a common problem in real option analysis.

The value of extension and overage options varies greatly between tenants. In general, the property owner can try balance the positive effects from the overage rents to the negative effects of tenant extensions. However, this study tries to highlight that, as usual, using the “law of averages” can result into poor valuation in this context as well. Even the data used in this study provide valuable findings for the property owner as an analytical deduction can be made that certain types of tenants have higher volatilities and this should be acknowledged when valuing options within lease contracts.

Previous literature in this topic often takes the input data for the option valuation as granted rather than trying to identify the real-life data available for the calculation. This is a common problem in real options valuation and it seems to be one of the reasons why option valuation has not been used widely in practice. This study has used real-life data to assess the problem and more importantly assessed the data across different types of tenants. The volatility spread between different types of tenants has not been discussed previously, even though it has a significant importance when using option pricing in practice.

The aim of this paper is to introduce a framework that helps to identify strategic themes on which real estate investors form their strategies. A holistic approach to strategic management in real estate management has enjoyed popularity in corporate real estate research, while similar research has been lacking from the investor-based real estate management.

The research design consists of two main parts: 1) formulating propositions based on existing literature and 2) attempting to validate the propositions through a qualitative interview study with major real estate owners in Finland.

The main finding is that the current real estate investors reflect the transient nature of competitive advantages and assess their strategies accordingly. The companies consider the traditional profitability and revenue growth aspects of their business but also a more long-term future growth dimension. As an outcome, the investors base their strategies on eight strategic themes which are “Innovation”, “ESG”, “Marketing and sales”, “Financial management”, “Leasing management and tenant satisfaction”, “Competitive environment and portfolio management”, “Outsourcing and strategic partnerships” and “Cost and operation optimization”.

This paper opens opportunities for future research concerning different strategies in real estate investment business and their impacts.

The presented framework provides support for real estate investors to create real estate management strategy or to evaluate their current strategy and to recognize operational actions and decisions that are relevant for their strategy.

This paper provides an extension to corporate real estate (CRE) literature by showing that the CRE theories are adaptable to real estate investment and provide value for their strategic management. This paper also contributes to real estate investment literature by providing a well-founded and empirically contested strategic management framework, the IREM framework, for identifying strategic themes on which real estate investors form their strategies.

The purpose of the study is to estimate the potential of end‐user effect on energy conservation in office buildings. The study quantifies the energy conservation potential and estimates the current level of energy management in four banking organisations in the Nordic countries.

The multiple case study employs quantitative scenario analysis for estimating the energy conservation potential of office equipment and lighting, and uses a qualitative model for estimating the current level of end‐user energy management in the organisations.

The study found that noticeable potential for energy conservation exists in the end‐user energy consumption. The tested scenarios significantly decreased the yearly electricity consumption of office equipment, for some 70 per cent, from 21 kWh per m² to 6 kWh per m². The electricity consumption of lighting was also noticeably improved, for some 30 per cent, from 38 kWh per m² to 27 kWh per m², equalling a 29 per cent reduction there. Altogether, the identified savings equal an improvement of roughly 20 per cent in the overall electricity consumption of the organisations. At the same time, the evaluation of current energy management showed that the management practices implemented represent only a rather modest level of end‐user energy management.

The multiple case study focused on four Nordic countries and banking organisations only. As the banking sector tends to be more conservative than some other industries, the results are not necessary valid in all industries. The simulation tools used, especially for lighting, only give estimation of the “best case” type of situation for tested scenarios, in which it is assumed that all end‐users would start to behave according to the scenario.

This study implies clearly that end‐user‐energy‐management services are needed in FM. Although the user behaviour is more challenging to manage than pure technology, it can be quite profitable. For example, in the studied organisations, the savings found in end‐user energy would equal yearly profits of roughly 1.7 million €, i.e. some 20 per cent of the overall electricity budgets of the companies.

Most of the quantitative energy conservation studies in the offices have concentrated so far on new constructions and building system improvements. This study quantifies the potential influence of good facilities management with the end‐user activation on the energy efficiency of office buildings.

The study was set to determine the environmental objectives of building end‐user organizations in an office environment and to anticipate the environmental management demands this could set on facility management.

This qualitative study uses four independent data sets and triangulation approach by combining data archives with time series analysis method, semi‐structured interviews, case study and a survey.

The results of the paper state the gap between the environmental objectives and practical management of environmental issues. Same environmental management themes, namely energy efficiency, waste management and reduction of climate change emissions, seem to be important for end‐users of buildings. A new trend, in which the end‐users require facility organizations to provide environmental management services, was observed as well. End‐user companies wish to receive comprehensive reporting and recommendations on improving a company's or facilities' environmental performance.

Since the study included only globally and/or environmentally active end‐users, the results of the survey are most representative for large European or North American companies which are progressive in environmental management. Future research is suggested to focus on information management, collaboration and communication between facility and end‐user companies.

At the practical level, the potential of FM has not yet been well utilized due to the lack of communication and understanding by both parties. Facility management companies can make use of the findings, e.g. when developing more comprehensive services or evaluating their own operations.

The results anticipate present and upcoming trend of end‐users' setting environmental requirement for FM organizations.

The study described in this paper quantifies the environmental impact of service sector companies. It demonstrates the importance of facility activities in the environmental strategy of such companies. A multiple‐case study approach and a life‐cycle assessment framework were used to estimate the environmental impact of five service companies. The result showed that for only around 5 per cent of total expenses, facility activities caused over half of the environmental impact in all cases, supporting the original hypothesis that the role played by facilities is of the utmost significance. However, the results varied somewhat between the environmental impact categories studied. For example, the contribution of facility activities to the climate change category ranged from 47 to 84 per cent, but ranged from 28 to 56 per cent in the summer smog category.

The purpose of this study is first to evaluate whether real options analysis (ROA) is suitable for valuing green building certificates, and second to calculate the real option value of a green certificate in a typical office building setting. Green buildings are demonstrated as one of the most profitable climate mitigation actions. However, no consensus exists among industry professionals about how green buildings and specifically green building certificates should be valued.

The research design of the study involves a theoretical part and an empirical part. In the theoretical part, option characteristics of green building certificates are identified and a contemporary real option valuation method is proposed for application. In the empirical part, the application is demonstrated in an embedded multiple case study design. Two different building cases (with and without green certificate) with eight independent cash flow valuations by eight industry professionals are used as data set for eight valuation case studies and analyses. Additionally, cross-case analysis is executed for strengthening the analysis.

The paper finds that green certificates have several characteristics similar to real options and supports the idea of using ROA in valuing a green certificate. The paper also explains how option pricing theory and discounted cash flow (DCF) method deal with uncertainty and what shortcomings of DCF could be overcome by ROA. The results show that a mean real option value of 985,000 (or 8.8 per cent premium to the mean property value) was found for a Leadership in Energy and Environmental Design Platinum certificate in the Finnish property market. The main finding of the paper suggests that the contemporary real option valuation methods are appropriate to assess the monetary value and the uncertainty of a green building certificate.

This is the first study to argue that option-pricing theory can be used for valuing green building certificates. The identification of the option characteristics of green building certificates and demonstration of the ROA in an empirical case makes questions whether the current mainstream investment analysis approaches are the most suitable methods for valuing green building certificates.

The study aims to investigate the effects of a remote energy management service to the energy consumption of retail buildings. The study focuses on analysing the changes in energy consumption after the implementation of a facility service concept where building processes are optimized with a remote energy management system. The paper seeks to demonstrate that remotely operated building management practices, which allow high competence service for all facilities, have a positive impact, beyond traditional facility services, on energy and environmental performance of buildings.

The research analyses the metered energy consumption of two retail building portfolios comprising altogether 44 properties. Additionally, secondary data are collected from archive reviews, observation and interviews.

The research shows that remote energy management service reduced the total energy consumption during the two-year service period by 12 and 6 per cent depending on the portfolio. Electricity consumption was found to decrease by 7 per cent and heating energy by 26 per cent on the average in the first portfolio, and 7 and 4 per cent in the second one, respectively.

Variation between buildings was found to be relatively high as the individual characteristics and history of the different buildings inevitably affect the achieved results.

The study indicates that remote energy management offers an effective means to reduce the energy consumption and costs, and ultimately climate impacts derived from buildings.

The study adds to the knowledge of facilities management in context to energy management and environmental performance of buildings.

The study aims to examine how the vicious circle of blame for sustainable buildings can be turned into virtuous loops of adaptation when considering sustainable buildings and what are the drivers for tenants and investors regarding sustainable buildings and gaining insights of investors’ and tenants’ corporate responsibility (CR) actions.

The paper consists of a literature review and two surveys. The literature review concentrates on exploring investors’ and tenants’ CR and sustainability drivers. Empirical evidence was gathered via two specific surveys. The first survey targeted investors, and the second survey targeted tenants to determine the focus areas of sustainability.

The findings of this study indicate that the vicious circle of blame can be turned into one of cooperation with respect to sustainable buildings if the mutual drivers for improving sustainability are linked with investor–tenant collaboration. Based on the survey, the tenants claim that productivity, corporate culture and image are the primary drivers for sustainable buildings, whereas the investors claim that corporate culture and image, tenant demand and marketability are the primary drivers. Both parties mentioned the same sustainability drivers: corporate culture and image and lower operating costs. However, it was found that investors are not communicating their CR actions to public or promoting image and productivity benefits of green buildings to potential tenants.

The limitation of this study is the sampling of Nordic countries, as there are indications of different situation in other markets such as the USA.

Improving sustainability in the real estate industry is linked to investor–tenant collaboration. In addition to common drivers, both investors and tenants have their own list of benefits and drivers for sustainable buildings. These drivers are linked to each other. Making progress with respect to sustainability in the built environment depends on people in the industry being aware of the importance of and possibilities offered by sustainable buildings, as well as being able and willing to act on this knowledge. Only through partnership can the full potential of the built environment be realised and help deliver an economically, environmentally and socially sustainable future.