Premium belongs to early adopters, the brown discount catches everyone else.

Across global CRE markets, the association between sustainability performance and asset value is becoming impossible to overlook. Green certified buildings consistently achieve higher rents, stronger tenant demand and, in many cases, superior valuations. What is correspondingly vital is the other side of the curve: assets that fall behind emerging standards are gradually exposed to the “brown discount,” where outdated energy performance or a lack of credible ESG credentials leads to pricing burden, financing friction or extended vacancy.

The dynamics behind this shift are not linear. As shown in diffusion-style ESG curves, each sustainability measure from LED retrofits to certification schemes to EU-aligned performance standards enters the market in waves. Early adopters often capture the strongest premium because they stand out in a less saturated field.

As adoption becomes mainstream, premium naturally narrows, while non-compliant assets begin sliding further into discounted territory. The message for investors and asset owners is clear: sustainable upgrades are not simply ethical decisions, they are strategic moves that directly influence liquidity, competitiveness and long-term value preservation.