Creative Construction: The Capacity for Environmental Innovation in Real Estate Development Firms

Abstract

Despite advances in understanding green building performance in property markets, the green development process is poorly understood. Green development adopters change firm structure in three ways to make adoption of environmental innovation easier: they take greater control of the projects, they seek more patient capital (either by identifying a patient investor or by providing more equity), and they create longer term relationships with design and construction talent. Through a webbased survey, and follow-up interviews with two survey respondents, the paper examines three hypotheses: (1) green development adopters and their investors take a longer-term stake in projects; (2) price competition is less important than competition over quality, and (3) the developer takes greater control, especially in the provision of design and construction services.