Environmental Performance and the Cost of Capital: Evidence from Commercial Mortgages and REIT Bonds
Project Manager:
Erkan Yönder
Section:
Finance
Research Areas:
Real estate financing (real estate investment trusts, commercial real estate), corporate finance, behavioral finance, green buildings and corporate sustainability
Project Start Year:
2014
Project End Year:
2017
Phone:
0 (216) 564 95 15
E-Mail:
About the Project:
This project aims to demonstrate the profitability of building investments with green building certificates, which are based on reducing the negative impacts of the real estate on the environment, in order to promote clean energy use along with sustainable city and environment and also to guide real estate companies towards these types of investments. It also investigates the impacts of more investments to be realized by real estate companies in the buildings with green building certification, which is a sustainability criterion in the US, on the companies' performances.
Project Finding:
The findings of the project uncover that the higher the rate of green buildings in the real estate portfolio, the lower the cost of borrowing in corporate bonds. The project has also revealed that mortgage interest is reduced if a real estate with a green building certificate is pledged as collateral.