The impact of minimum energy performance standards on the commercial real estate market

Improving the energy efficiency of buildings is widely seen as essential for reducing emissions, yet there is limited evidence on whether minimum energy performance standards effectively change investment behavior and market outcomes. In the Netherlands, a "label C obligation" requires all office buildings larger than 100 m2 to hold an energy performance certificate of C or better by 2023. The policy was announced in 2016 and formally adopted in 2018, providing a clear timeline to study its effects. Here we show that, following the announcement of the regulation, office buildings were significantly more likely to improve their energy performance than other commercial properties not subject to the standard. We further show that offices meeting the label C requirement experienced a 21.8% increase in transaction prices after the policy's formal adoption, while rental rates remained largely unchanged. These findings indicate that minimum energy performance standards can stimulate energy efficiency investments and be capitalized into asset values, even in settings with limited enforcement.