Real Estate's Lost Capabilities

The real estate market is in the middle of its most significant structural transition since the global financial crisis. We know this because we were there for the last one. Cost inflation, operational risk, tightening regulatory obligations, and the widening gap between resilient and stranded stock are creating a more complex operating environment for owners and managers. Combined with current geopolitical tensions, and shifting social requirements, this has led to at least 3 years of stagnated investment into the sector and new models of capital allocation^[1].

Beneath these more visible factors lies an additional, long-term shift: the erosion of in-house capability across sustainability, operations, climate risk, and data. Years of restructuring, ESG fatigue, and political polarisation have hollowed out internal teams at the precise moment lenders, insurers, and regulators are demanding higher-quality evidence, governance and strategic clarity.

In January 2026, Karteria Partners was formed to provide exactly these lost capabilities in a fractional, practical and systemic format, supporting clients in creating the operational and financial resilience required for the next cycle of real asset investment, and far beyond.

A Market Defined by Investment & Operational Risk

The financial implications of inadequate sustainability and climate risk management are no longer theoretical. Lenders now routinely decline to finance assets without credible resilience and adaptation strategies, and insurers are withdrawing cover for climate-exposed assets and market evidence is revealing transactions are failing due to lack of insurability and missing asset-level transition plans. Investors themselves have shifted focus: the priority is no longer ESG branding but operational performance, resilience, and clarity on how value will be protected in a changing regulatory and climate environment.

Risk pricing, capital & debt availability, adjusted underwriting and valuation integrity now require a new level of data on the effectiveness of resilience/adaptation planning, operational and energy infrastructure. All at a time when industry capability has been eroded.

Mind The Capability Gap

Restructuring over the last three years has removed a significant tranche of experienced sustainability and operational professionals from the sector. Internal teams have compressed. Senior leadership roles have disappeared. Expensive digital and data programmes are failing to deliver on their promises due to immaturity and lack of operational grounding. ESG has become politically sensitive, leading to under investment in critical skills just as regulatory complexity and climate risk requirements intensify. This has created a structural imbalance, meaning organisations now have fewer expert resources at the very moment the volume, specificity, and financial significance of sustainability-related risk have never been higher.

The Structural Issues Real Estate Must Now Solve

Financing access increasingly depends on credible asset level and portfolio level sustainability plans. Climate risk underwriting is tightening. Operational efficiency has become the top industry priority. Stranded asset risk is accelerating across Europe. And digital readiness is now a prerequisite for delivering reliable data, regulatory reporting and AI-enabled optimisation. These issues cannot be solved by compliance alone; they require technical depth, investment awareness, engineering literacy and hands-on operational expertise without which they run the risk of becoming expensive experiments that serve to enhance the performance gap, rather than close it.

A Critical Issues Check List

o  Access to Finance: resilience as a systemic condition, not an add-on

Lending requirements are shifting and capital access is increasingly contingent on:

• credible decarbonisation and adaptation plans

• improved energy performance

• robust data and evidence

• clear governance and risk ownership

With market evidence indicating that lenders will not finance assets lacking effective plans, organisations need senior, experienced support to create investment-ready strategies that stand up to scrutiny.

o  Insurance Viability and Climate-Adjusted Underwriting

Climate risk is already a valuation and liquidity risk. Insurers are declining cover on vulnerable assets, and transactions are failing because of it. Karteria’s engineering and evidence-backed approach to asset resilience, building systems and retrofit feasibility is designed to protect valuation integrity.

o  Operational Efficiency

The JLL 2026 Outlook identifies operational cost efficiency as the industry’s top priority, no surprise in the current budget-constrained environment; but real gains come from technical, integrated work across energy optimisation, BMS/BEMS alignment, data strategy, retrofit sequencing and occupant-experience improvements. Karteria’s Partners have delivered these programmes at scale and are well aware that none of this sounds sexy, rather it requires a systemic approach to portfolio underwriting and asset management backed by a solid data foundation.

o  Data, Digital Infrastructure and AI Readiness

More than 90 percent of real estate investors piloted AI in 2025, yet only 5 percent achieved ROI.[2] The consistent cause: missing data strategy, poor system integration and insufficient operational expertise. At Karteria we openly deploy the best AI agents and tools to provide software and data-architecture leadership, enabling clients to deploy strong data models, align systems and build AI-ready governance.

o  Stranded Asset Risk and Retrofit Feasibility

130 million sqm of European office space is at risk of stranding^[3] and owners (and their investors) are seeking answers urgently:

● retrofit or repurpose?

●  capex sequencing?

●   which interventions genuinely protect NOI and liquidity?

Karteria Partners

We believe this knowledge gap is one of the largest hidden risks in real estate investment but we are also conscious that the market and its requirements have restructured to adjust to the current budget challenges and the advent of AI. Drawing on the Partners’ unique skills and expertise, Karteria Partners combines deep technical sustainability experience, global investment and governance expertise, and recognised climate risk leadership. The Partners’ backgrounds span global operators, private equity platforms, leading investors and the development of market-defining sustainability strategies with corresponding implementation and proof of effectiveness.

• Philippa Gill brings almost 20 years of integrated investment, operational, sustainability and data architecture leadership, spanning Blackstone, Tishman Speyer, EVORA and her own strategic advisory work.

• Meike offers a rare blend of engineering expertise, ESG strategy and operational leadership. With over two decades in the industry incl. with WSP and EVORA Global, she brings deep technical credibility, a proven ability to translate complex risks and requirements into practical, value-focused action.

How Karteria Operates

Karteria’s advisory model is deliberately practical and value oriented. Resilience, climate risk and data governance are treated as foundational financial disciplines to protect & enhance value, reduce costs, support access to capital, and improve operational resilience. Our work focuses on the areas where clients most need senior capability:

• Operational value protection: technical assessments, climate risk diagnostics, retrofit feasibility, energy optimisation and system integration.

• Capital access readiness: lender aligned strategies, insurance viability assessments, CSRD/SFDR compliant data and reporting architecture.

• Digital and data modernisation: design of ESG data models, software alignment, API strategy, AI readiness and reporting automation.

• Fractional leadership: temporary CSO, Head of Sustainability or Responsible Investment support during restructurings, transitions or growth phases.

• Integrated advisory across assets, funds and portfolios, connecting strategy to execution with investment grade discipline.

• Procurement management and technical advisory to B2B and prop tech companies wanting to enter the market

Karteria’s technical grounding and investment expertise offers pragmatic, financially rational pathways and can be deployed at asset, portfolio or company level. Where appropriate, we rely on our expansive network of trusted delivery partners to widen the offering. Our aim is simple: to strengthen the financial and operational foundations of real asset businesses and their associated partners by applying the Partner’s deep expertise in the most effective way.

 

Founder Perspectives

Founding Karteria[4] was the obvious next step in our collective careers.  Frustrated with the fragmented approaches to sustainable investment and operational management across the market and backed by decades of trial and error, we believe there is simply a better way to drive performance across the industry which creates systemic and long-term value for the triad of people, planet and profit.

“Looking back across the varied experiences and learning from my career to date, whether in house or as an advisor, it struck me that the most impactful strategies I have worked on have all been fully-integrated and laced with lashings of common sense.  We have taken care to embed this philosophy in Karteria’s foundation, and combine it with our ability to deliver practical solutions backed by our hands-on expertise of the built environment.”

Philippa Gill

“Investors and Operators alike are having to adapt to a deep restructuring of markets, technology and client demand at a time when the imbalance between these factors and the necessary capabilities within internal teams is under pressure. Our combined skills across Karteria and or new operating structure will allow us to provide the right support for the next evolution of the industry.”

Meike Borchers

References

• https://www.jll.com/en-uk/insights/market-outlook/global-real-estate 

• https://www.jll.com/en-uk/insights/market-perspectives/global 

• https://knowledge.uli.org/en/reports/emerging-trends/2026/emerging-trends-in-real-estate-united-states-and-canada-2026 

• https://europe.uli.org/research/emerging-trends/

• https://www.pwc.com/us/en/industries/financial-services/asset-wealth-management/real-estate/emerging-trends-in-real-estate-pwc-uli.html

• https://www.zurich.com/economics-and-markets/publications/economic-and-market-outlook

• https://www.aberdeeninvestments.com/en-ie/institutional/insights-and-research/the-investment-outlook-2026-introduction 

[1] PwC & ULI Emerging Trends in Real Estate 2026 { See links in reference section for all sources)

[2] JLL Research, 2025 Global Outlook

[3] ULI Europe Emerging Trends Report / Zurich Economic and Market Outlook

 [4] Karteria Partners is a branding and collaborative marketing platform.  It is not a legal entity in its own right. For more information see www.karteriapartners.com