Organisations able to identify and price energy risk before volatility forces reactive decisions will be better positioned to preserve cash flow durability and protect exit valuations.
Such is the view of Hines global head of real estate, Steve Luthman, who argues energy risk should be incorporated into underwriting “from day one” alongside vacancy, capital structure and credit, rather than treated as an operating afterthought.
In a new paper called How Energy Could Rewire Real Asset Performance, Luthman and his colleague Sean Murphy, head of global management solutions, write that energy has become a crucial element in how real assets respond to inflation and the manner in which they are financed. Energy also plays a large role in how tenants experience cost pressure and how competitive they remain over time. It is imperative, therefore, that energy intelligence — understanding, measuring, and managing how energy exposure affects asset performance — b
