Heat Stress and Commercial Real Estate Returns

We investigate the relation between heat stress and commercial real estate (CRE) return and find a negative cross-sectional relationship. The total return on commercial property decreases when the local temperature is abnormally high. Furthermore, we show a negative cross-sectional association between abnormal temperature and appreciation return, but an insignificant association between abnormal temperature and income return. Overall, this paper suggests that climate risk negatively impacts CRE returns, contributing to extensive literature researching climate risk and CRE returns