Galvanize has tied compensation to emissions targets in a commercial real estate fund, an uncommon practice in the US market, according to Joseph Sumberg, head of real estate at the asset management firm. The energy-focused investment firm has raised $370 million for its first real estate fund and plans to get its properties to operational net zero within three years of purchase.

Sumberg told New Private Markets that the firm is committing to achieving operational net zero in its portfolio within three years or less of owning every property. This compensation structure links Galvanize's financial incentives directly to environmental performance, creating a novel approach in the US real estate investment landscape where such practices remain rare.

The move represents a significant shift in how real estate investment firms structure their incentives. By tying fees to emissions targets, Galvanize is pioneering a model that could influence how other firms approach sustainability in commercial real estate. The three-year timeline for achieving net zero across its portfolio sets an ambitious benchmark for the industry.