Skanska, the Swedish construction giant, is scouring the Boston market for new commercial development opportunities. But the company isn’t just trying to take advantage of dislocation in the commercial market. It’s also trying to force a dramatic reappraisal of the way developers look at buildings in the ground, and on their books.

“It’s better to enter when the market is down, rather than at the top of the market,” argued Michael Pascavage, regional manager for Skanska USA Commercial Development. “There will be good acquisition opportunities in the coming years. We’re a patient company. [Skanska’s] mantra in Europe and Scandinavia is land-banking and long-term, patient development.”

Boston is one of three of Skanska’s 24 American construction markets to get a development unit; the others are Houston and Washington, DC. Pascavage said Skanska is chasing Class A office, institutional, medical, educational, medical and government development work in downtown Boston, Cambridge, 128 West and along the Mass Turnpike.

They’re the submarkets populated by the most likely early-adapters of Skanska’s deep-green development mentality: “Companies with a more honed level of social consciousness, those that want to lead the pack, with employees mandating their companies do the right thing.”

A Mature Market

Skanska’s American development arm recently inked its first development deal, taking control of a stalled $85 million office project in Washington, DC. In that case, the developer had opened up the ground without financing in place, only to have to halt work. Skanska is resuming construction on spec. In Boston, it’s eyeing similar opportunities – distressed developments that need a joint venture partner and a capital infusion, or stalled projects whose owners are looking to cash out.

“The Boston market is mature,” Pascavage said. “A lot of the development sites are encumbered already. It’s not easy to go out and acquire a raw site and do the classic buy, entitle, build and lease. We may be buying opportunities as people look to get rid of assets that may be problematic.”

In Skanska’s view, capital markets’ upheaval creates opportunistic buys in the near term; they believe long-term energy and environmental trends mandate building now, while other developers are waiting out the storm.

Noel Morrin, the company’s vice president of sustainability and green construction, told Banker & Tradesman he foresees a sea change coming in building codes and regulations. Morrin, visiting Boston from Skanska’s home office in suburban Stockholm, said developers should assume that future energy prices will rise dramatically, while government bodies will press increasingly stringent energy codes. He said his development arm seeks to develop buildings that are “future-proof.” His team regularly beats European codes by 50 percent. Those super-efficient buildings will become increasingly valuable as energy and environmental regulations evolve.

However, Morrin said, “The real challenge is the existing stock. There will be people left behind with portfolios of obsolete buildings.”

“As new technologies come into play, older product becomes outmoded,” Pascavage added. “The Boston market has a lot of 20-, 30-, 40-year old, less efficient buildings. New product will better represent the full spectrum of sustainability. The older product will either have to respond as best they can, or be relegated to less productive occupancies.”

A Jones Lang LaSalle paper surveyed the Obama administration’s environmental goals – including reducing carbon emissions 80 percent by 2050, making all new buildings carbon neutral by 2030, and increasing existing buildings’ efficiency by 25 percent over the next decade – and concluded, “building green from the ground up seems to be the only strategy for sustaining competitive advantage and increasing asset values.”

At a recent NAIOP Massachusetts forum, Seth Jaffe warned that state regulators are almost certain to slap some form of new regulations on commercial properties as they try to meet new mandates to cut emissions by 10 percent to 20 percent by 2020, and 80 percent by 2050. Jaffe, a partner in Foley Hoag’s Boston office and coordinator of the firm’s environmental practice group, said while Massachusetts has yet to articulate just how it will meet those emissions targets, it can’t get close to them by just focusing on cars and power plants.

“It’s going to affect all of us,” Jaffe said. “It’s going to be buildings as well. We’ll be far beyond LEED before we’re done with all this. They’re going to have to look at existing buildings.” He added, “Everything you do is going to be subject to increasing regulation, including the buildings you are looking to build, buy, or sell.”

Skanska sees that future, and believes there’s a big opportunity in bringing it into the present.

“We’re in position to exploit long-term trends in green construction and development,” Morrin argued. “Look at the global drivers. Is the trend your friend?”

Skanska took their offices in the Empire State Building to LEED Platinum – a transformation that led the building’s owners to overhaul the rest of the iconic tower. Morrin called the Empire State job “kindergarten stuff.” He’s more interested by what he called “deep green” projects. At a Skanska apartment complex near Stockholm, rooftop solar panels charge up electric cars; every resident gets one, for free. The company is also developing a new zero-net-energy neighborhood in Sweden. In London, it embedded geothermal technology in an office building’s concrete pilings.

“We’ve bought into highly sustainable and deep green design from the development side,” Pascavage said. “The energy reduction alone, the reduced operating costs, goes straight to your bottom line, and increases the value of the building in an economic sense. Let alone the real benefits accrued from those efforts.”

“We want to show people what’s possible and create a different level of ambition,” Morrin said. “As just a dumb construction company, we can be as dumb as you want us to be. As owner-developer, then, we really let it rip. We apply whole-life costing. You see very quickly the cost of doing a lot of this is negative. As developer, we’re not worried about the upfront costs. It’s more sending a message that more can be done. We need to challenge the whole system.”