The construction industry is the world's largest consumer of energy and producer of greenhouse gases. For this reason, there is a broad debate on how to make the built environment more sustainable. Although the positive externalities of energy-efficient retrofitting and new construction are known, the economic effects that green building has on the real estate sector in Italy are less evident. The aim of this paper is to analyze the Italian real estate market to investigate if, and to what extent, demand appreciates the supply of green real estate assets. The research focused on the analysis of 55 development projects of office buildings (with and without environmental certification) located in Milan, at present the most dynamic and flourishing real estate market in Italy. Through these case studies the authors investigated the premium price that is generated in certified real estate development projects. The results highlight a premium price, especially for high levels of sustainability. Similarly, the rate of absorption of certified assets reflects a preference for green properties, which are absorbed by the real estate market in less than half of the time foreseen for real estate without an environmental certification.

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Abstract. Enhancing public real-estate assets has been at the centre of a lively debate in Italy. Public policies have focused on the supply-side, assuming that private demand was ready to develop assets. Yet with the decline in the real-estate market, conditions have greatly changed. Italian authorities begun to experiment new approaches to enhance public assets by supporting the grass-roots participation. The aim of this research is to determine the conditions that can predict the successful outcome of bottom-up value creation dynamics in public real-estate properties. Through a multivariate statistical analysis, the study proposes an interpretation of the elements that determine the successful outcome of bottom-up processes. JEL classification: R53

The economic enhancement of public real/estate property has become a central theme in Italy. In recent years, public policies have been focusing on the supply-side of the real estate market, assuming that investors and developers could handle the value creation process of the abandoned and underused public real/estate property. More recently, with the decline of the investors’ demand to develop public real-estate assets, new approaches to property-value creation have emerged. These new processes are focused on the demand side, through self-organized grass-roots participation using the assets for profit and not-for-profit purposes. The aim of the paper is to pinpoint some crucial conditions for these bottom-up processes to be effective through the analysis of fifteen bottom-up experiences in Italy. Five conditions emerged to reliably predict a fruitful outcome of bottom-up value-creation processes of abandoned or under- used public assets