The lifecycle impact and value capture of circular business models in the built environment

Abstract Circular economy (CE) has been of utmost interest in the industry and research community in the preceding years. However, CE is still a nascent research field in the built environment context. As technological advances within CE are slowing, the incorporation of business models into the concept is deemed important to achieve the necessary transition. Circular business models within the built environment should take a holistic perspective and a lifecycle optimization approach. The research aim is twofold, firstly, we aim to contribute to the assessment of impacts of CE business models. Secondly, we aim to establish how real estate development organizations can optimize value capture from adaptive reuse projects. We engage in an in-depth mixed methods case study assessing and comparing two adaptation scopes of a former textile factory to offices. The minor scope includes basic measures to bring the building up to standard, whilst the major scope includes the same, with the addition of space efficiency measures, extended building services, onsite energy production and various circular activities. We find that the major scope consequently captures more of the identified value propositions of the organization than the minor scope. We conclude that more circular activities do not necessarily lead to better environmental performance, however, may lead to higher profit and social gain. The study contributes to existing knowledge of impact assessments, and highlights the complexity of balancing environmental, social and economic impact in the built environment context. The assessment framework may be used by real estate developers prior to investments decisions.


Introduction
During the past decade, Circular Economy (CE) has received increasing interest in the industry and research community (Geissdoerfer et al. 2017, Reike et al. 2018).CE challenges the linear economy model of make-usedispose, focusing on retaining value that is already created in the system (Ellen MacArthur Foundation 2013).Value retention may also be referred to as looping, and CE is sometimes depicted as loops which include a hierarchical view.The shorter the loop, the more effective a measure is in terms of its value retention, as it requires less intervention, such as energy or resources, from outside the system (Reike et al. 2018).
The World Commission on Environment and Development (1987) describes in their renowned report 'Our Common Future' limitations to sustainable development as not absolute, but rather determined on the state of technological advances and social organization.As technological advances within CE are slowing, the incorporation of business models into the concept is deemed important to achieve the necessary transition from linear to circular economy (Geissdoerfer et al. 2017, Reike et al. 2018).The key components of a business model comprise value proposition, value creation and delivery and value capture (Osterwalder et al. 2011, Bocken et al. 2014).Value proposition establishes the solution to a problem or a need through detailing a product or a service (Osterwalder et al. 2005).Value creation and delivery establish what is to be done, how and by whom, including the key activities and needed resources (Bocken et al. 2014).Finally, value capture reveals what is gained from the business models, traditionally through detailing the cost structure and revenue model (Osterwalder et al. 2005).For sustainable business models, the gain should not only be economic, but also environmental and societal (Boons andL€ udeke-Freund 2013, Bocken et al. 2014).CE business models incorporate circular principles in the value proposition (Manninen et al. 2018).Bocken et al. (2014) introduce sustainable business model archetypes, several of which may also be considered circular business models, namely, creating value from waste, delivering functionality rather than ownership, adopting a stewardship role, encouraging sufficiency, as well as re-purposing the business for society or the environment.At the same time, further research is still needed to understand the environmental impact of circular business models (Baumann et al. 2022(Baumann et al. , B€ ockin et al. 2022)).
CE implementation in the built environment is fragmented and slow (C ¸imen 2021).CE policy, industry practice and previous research alike have been criticized of focusing on new construction and less effective measures, such as, deconstruction and recycling of building materials (Huuhka and Lahdensivu 2016, Pomponi and Moncaster 2016, Baker et al. 2017, Kyr€ o 2020, Munaro et al. 2020).Waste valorization through recycling is one of the most popular topics within CE research in the built environment, while less CE research in the built environment focuses on resource reduction (C¸imen 2021).This bias is further enhanced by, for example, legislative frameworks in the EU favoring waste management as opposed to reuse and demand management (Giorgi et al. 2022).Focusing on recycling and new construction is problematic for several reasons.Recycling is a long loop measure, as high energy input is required in the recycling process (Reike et al. 2018).Consequently, even if all materials used in new construction were recycled, the embodied energy and carbon emissions would still be significant.Further, demolishing buildings results in significant value loss, and it is known that most demolished buildings are not at their technical end-of-life (Huuhka andLahdensivu 2016, Moncaster et al. 2022).Finally, and paradoxically, the building stock renews itself slowly (Munarim and Ghisi 2016), so the rate of demolition would not even enable large scale procurement of recycled material for new construction.
Instead, CE business models within the built environment should take a holistic perspective (Munaro et al. 2020), and a lifecycle optimization approach (Leising et al. 2018).Dytianquin et al. (2021) found that the CE measures with the most environmental impact, were also those which accrued the most economic benefit.Hart et al. (2019) identify cultural, regulatory, sectoral and financial barriers, caused by short-term thinking.Lifecycle assessments of the environmental and economic impact of circular business models in the built environment are still lacking (Hossain et al. 2020).Jensen et al. (2022) call for more holistic methods for prioritizing and evaluating sustainable building renovations, particularly ones that integrate social, economic and environmental sustainability.
The research aim is twofold.Firstly, we aim to contribute to the emerging topic of assessing circular business models within the built environment.We build on Manninen et al. (2018) framework for circular business model evaluation.Based on existing knowledge, we propose to include impact indicators relevant for assessments in the built environment.Further, we test the framework to provide insight into its usefulness in the built environment context.Our second aim is to establish how real estate developers can optimize the value capture from adaptive reuse projects.Specifically, we want to understand whether a major adaptation and larger initial investment yield higher overall (environmental, economic and social) value capture than a minor adaptation with a smaller initial investment.To answer the question, we engage in an in-depth, mixed method case study comparing two adaptation scopes of a former textile factory to offices.
The article first reviews existing research and determines the reference system to be used for impact assessment.The research design, data and methods are described in "Materials and Methods" section."Results" section defines the value propositions, identifies the key stakeholders and presents the results of the impact assessment."Discussion" section discusses the results by verifying the value propositions.The article concludes with recommendations for practice and further research.

Adaptive reuse, sharing and impact assessment
Extending the useful life of a product, and optimizing use through sharing are established CE strategies (Ellen MacArthur Foundation 2015, Kn€ able et al. 2022).In the built environment, they can take the form of building adaptation and shared spaces (Arup 2016, Kyr€ o 2020).

Extending useful life: adaptive reuse
Extending the useful life of buildings is more effective than new construction with reused or recycled materials, as it saves embodied energy and carbon by keeping the resources in the building (Assefa and Ambler 2017, Foster and Kreinin 2020).Even without any issues with the physical performance of a building, a building tends to be considered below acceptable standard after 40 years due to functional obsolescence (Gaspar and Santos 2015).Adaptive reuse is the process of giving existing buildings new life through repurposing to a new use (Langston 2008, Yung andChan 2012).It is a distinct form of renovation, which is typically linked to vacancy, and the building's original use no longer serving purpose (Armstrong et al. 2023).
The environmental efficiency of adaptive reuse mainly stems from saved embodied energy and carbon (Foster and Kreinin 2020).Itard and Klunder (2007) found that renovation saved embodied materials 60% more effectively than demolition and rebuild.They conclude that reusing a building is more environmentally sustainable, although their study does not consider operational energy use (Itard and Klunder 2007).However, adaptive reuse also has the potential to reduce operational energy use because of energy saving measures introduced in the renovation (Munarim and Ghisi 2016).
Despite the known benefits of adaptive reuse, Baker et al. (2021) found that environmental aspects are rarely the motivation for building conservation.However, building conservation and CE both intend to safeguard value by extending the life of a product with minimal intervention (Huuhka and Vestergaard 2020).The cost efficiency of adaptive reuse may vary depending on the condition of the building (Bullen andLove 2010, Baker et al. 2017).Renovation projects are complex which can cause cost overruns (Rajala et al. 2022).However, most typically adaptive reuse is also more cost-efficient (Bullen 2007, Thornton 2011). Moreover, Rajala et al. (2022) find that the return on assets of companies engaged in renovation was higher than those engaged in new construction, which reflects the lower capital intensity of renovation projects.

Optimizing use: sharing
Sharing is considered a key circular strategy, as it reduces the overall need for resources (Ellen MacArthur Foundation 2015, Reike et al. 2018).As opposed to the traditional ownership models of the economy, sharing business models offer access or functionality over ownership (Bocken et al. 2014), and are described as the business models of the future (Daunorien _ e et al. 2015).Sharing spaces can improve space efficiency (Francart et al. 2020) either by increasing the utilization rate of the area, or the time that it is used (H€ ojer and Mj€ ornell 2018).Sharing can take many forms, for example, sharing the same space with unallocated personal spaces, sharing part of a space at the same time with others outside of the organization, sharing of space within a building in a closed community, or sharing spaces between users in a network of buildings (Brinkø et al. 2015).Sharing may occur simultaneously or during different times of a day or week (Brinkø et al. 2014, Francart et al. 2020).Whilst increased utilization tends to increase the total energy use for the space, sharing reduces the energy use and associated climate impact per person (Francart et al. 2020).However, the motivation for space sharing is often prosocial, and derives from social, rather than environmental ambitions (Lundgren et al. 2022).

Lifecycle assessments in the built environment
No methodological framework exists currently for the evaluation of CE in the built environment (Hossain et al. 2020), however, a lifecycle perspective is often taken (e.g., Nasir et al. 2017, Deschamps et al. 2018, Eberhardt et al. 2019, Minunno et al. 2020, Fufa et al. 2021).A lifecycle assessment (LCA) is considered a reliable approach to assessing the environmental impact of a building (Munarim and Ghisi 2016).LCAs on a building level are complex and tend to include contradictory aspects (Braganc ¸a et al. 2010).Previous research has found varying importance of embodied carbon and operational emissions (e.g., de Wolf et al. 2017, Moncaster et al. 2018, R€ ock et al. 2020, Andersen et al. 2022).In most lifecycle assessments of CE in the built environment, the use phase is excluded and only the embodied carbon is considered (Andersen et al. 2022).The functional unit is another key aspect which makes it difficult to compare LCA results (Munarim and Ghisi 2016).Space efficiency, in the form of area per person is often omitted, even though it would better capture the functionality of the building (Munarim and Ghisi 2016).Bastos et al. (2014) found an inverted relationship between energy requirements per m 2 and per person, with larger buildings having lower energy per m 2 than per person.Francart et al. (2020) suggest that impact per person is the more relevant functional unit for buildings as the more common functional unit per m 2 does not incentivize efficient use of space.
Lifecycle costing (LCC) is a commonly used assessment of the total cost of a product or system over its life (Larsen et al. 2022), and can be used in combination with an LCA (Giorgi et al. 2019, Larsen et al. 2022).Ferreira et al. (2015) combined an LCA and LCC and found that the refurbishment of an historic building had less environmental impact than a new building, however, was less economically competitive.Sanchez et al. (2019) evaluated the environmental and cost performance of an adaptive reuse case and found that the environmental impact was lower than for a new building, and that the adaptive reuse also had ca 70% lower construction cost.Notably, the LCC only includes construction cost, not the revenue from the investment.A lifecycle profit (LCP) differs from an LCC, taking into consideration not only the costs, but also the generated income (Bejrum 1991), which aligns with the definition of value capture (Osterwalder et al. 2005).The results of LCAs and LCCs/LCPs, can be seen as complimentary, especially if the same system boundaries and time spans are used (Hoogmartens et al. 2014).Integrating different life cycle assessments can assist in the circular transition (Larsen et al. 2022), and ensure a more holistic approach (Ghisellini et al. 2018).

Materials and methods
The study employs a case study approach and with mixed methods, utilizing both qualitative and quantitative data and analyses (Saunders et al. 2009).Mixed, aka hybrid, method research designs are suitable when existing theory on the topic is in the intermediate stage, and when proposing relationships between new and established constructs (Edmondson and McManus 2007).In this study, CE is a new construct in relation to the more established business model and built environment constructs.The case study strategy was chosen as the study aims to explore a phenomenon in its real-life context, that is, circular business models in real estate development.Manninen et al. (2018) propose a framework for the evaluation of CE business models which includes five steps, namely, (1) definition of environmental value proposition, (2) identification of stakeholders and their role, (3) definition of reference system and assessment of environmental impacts, (4) verifying the environmental value propositions and (5) identification of improvement proposals.Defining value propositions is considered a significant step to having an effective business model (Osterwalder et al. 2005).CE can be enhanced through including circular principles in the definition of an organization's value propositions (Bakker et al. 2014, Bocken et al. 2016).Sustainable value propositions are described by Baldassarre et al. (2017) as creating shared value, whilst addressing sustainability and providing a product or service which meets a need, for a network of stakeholders.Therefore, identifying the stakeholders and their role is of importance in order to appropriately consider this shared value (Vladimirova 2019).
No methodological framework currently exists for the evaluation of CE in the built environment (Hossain et al. 2020).However, the Ellen MacArthur Foundation (2015) presents several potential indicators for CE generally, namely, resource productivity, circular activities, waste generation and energy and greenhouse gas (GHG) emissions.A lifecycle assessment (LCA) is generally considered a reliable approach to assessing the energy and greenhouse gas emissions of a building (Munarim and Ghisi 2016).Further, it is imperative to identify and carry out improvement proposals to deliver value for all stakeholders (Bernal-Torres et al.

2021).
This study employs the framework by Manninen et al. (2018), extending it to include not just environmental, but also economic and social aspects.Value capture of business models traditionally details the cost structure and revenue streams (Osterwalder et al. 2005), emphasizing the economic dimension.Boons and L€ udeke-Freund (2013) note that sustainable business models should capture, not just economic value, but also environmental and societal.The social dimension has largely been neglected in CE research (e.g., Kirchherr et al. 2017, Reike et al. 2018, Padilla-Rivera et al. 2020, Henry et al. 2021) and has thus been incorporated in this study through social value propositions.Figure 1 illustrates the research study design.
Energy consumption (kWh) and greenhouse gas emissions (CO 2 e) are the most common indicators for building environmental performance (Anand and Amor 2017) and are evaluated through an LCA also in this study.An additional two environmental indicators have been adopted from Ellen MacArthur Foundation (2015), namely, total mass of waste generation in tons and circular activities.Vacancy rate in percentage (Phyrr et al. 1989), as well as the number of seats per total floor area (Duffy et al. 2016) are typical key performance indicators in the commercial real estate sector, and therefore, employed also here.Net Present Value (NPV), the discounted cashflow from an investment, is typically used to evaluate investments in the real estate sector (e.g., Sundling 2019, Sundling et al. 2019) and will thus be used as a basis for the LCP.

Case description
The case study is a former textile factory in Malm€ o, Sweden.The brick building was first developed in 1901 and has since undergone several undocumented refurbishments.As the building had been allowed to dilapidate, many of the installations and components had reached their end-of-life.Two adaptive reuse options, including refurbishment, of the former textile factory are evaluated and compared in the study, hereinafter referred to as 'minor' and 'major'.The minor scope includes measures to bring the building services and components up to standard, without increasing the capacity.The major scope option includes the same, with the addition of tenant improvements and space efficiency measures, such as, increased capacity of building services and added interior walls.Space efficiency was further delivered through shared spaces, such as the courtyard, meeting rooms and other office space.The major scope also includes onsite green energy production.A full list of the respective scope of works are included in Appendix A. The project was underway during the study with the major scope of works, however, independent of this research design and results.

System boundaries
The system boundaries utilized for all assessments in the study are based on LCA system boundaries.The studied objects of assessment are the minor and major scopes, including the product stage and construction process, as well as end-of-life of demolished materials.To enable comparison between embodied carbon from the refurbishment and the use phase, this study includes a 50-year use stage within the system boundaries, however limited to maintenance, repair and operational energy.The building end-of-life has been excluded from the system boundary.The loads beyond the system boundary are related to recycling and reuse and have only been included qualitatively, whilst the other modules are included with quantitative data.The system boundaries contain all material used during the refurbishment project, including fixtures, fittings and services, which are usually omitted from building LCAs (Moncaster et al. 2018).The system boundary is presented in Appendix B.

Data
The study utilizes a mix of primary and secondary qualitative data and quantitative secondary data.The primary qualitative data was collected through interviews, supported by observations and photographs from site visits and follow-up emails.The first site visit and interviews took place in October 2021, with two of the authors, whilst the second site visit took place in October 2022 with one of the authors.The informants were the climate impact consultant (N1), project manager from an outsourced project management and construction company (N2), business developer for the building owner (N3), architect and end-user (N4) and engineer (N5).A full list of informants and reviewed documents can be found in Appendix C. The interview topics comprised the project scope, schedule, stakeholders and targets, including economic, environmental and social aspirations of the organization.
Secondary qualitative data comprises documents and webpages.The project documentation comprised tenders, investment analysis and contracts.Data from the interviews and documents was coded using template analysis.The codes which were extracted from the template analysis based on the case study data were then used to establish the value propositions, detect the stakeholders and identify circular activities.
The quantitative data is twofold.Firstly, the data used in the LCA and LCP was made available by the building owner in the form of project reports and calculations.Secondly, the background data, that is, estimates for emissions by material and products in the LCA, and market vacancy rate, were from generic public or commercial databases and reports.Considering the impact of coefficients on the overall LCA results (Moncaster et al. 2018) conservative values were chosen when available as they are higher than typical values and underestimating the impact is therefore less likely.A data list is presented in Appendix C and detailed in Lundgren et al. (2023).
The LCA was carried out as a hybrid method, mainly utilizing a process method as foreground data was available for most modules, and the process method is more accurate than the input-output method.To achieve a wider system boundary, an input-output method was employed for the maintenance and repairs modules, where foreground data was limited to projected costs.It is estimated that 85 and 90% of the foreground data relating to construction and demolition works was captured in the project documentation, respectively.The quantitative data was used to assess waste generation in total mass, energy consumption, GHG emissions and economic impact.

Uncertainties
When conducting lifecycle assessments, several uncertainties arise.The emission data used as a basis for the LCA are industry averages and contain inherent uncertainties.Moreover, the utilized data is location sensitive, and an evaluation of a similar case located elsewhere may deliver different results.For example, the energy mix is based on the Swedish energy mix, current and projected, the projected vacancy rate is based on the MSCI Property Intel market vacancy rates for the area, and transport emissions are calculated from the location of the building site.
When calculating the NPV and LCP, the selected discount rate and expected vacancy rate are sources of uncertainty.Finally, for both assessments, assumptions had to be made on the frequency and extent of future renovations.To address these uncertainties a sensitivity analysis was undertaken for the LCP with discount rates 4 and 8%, vacancy rates of 3, 5 and 9% for the major scope and 1, 5 and 9% for the minor scope, and timing of future renovation for the minor scope (at 15, 20 or 25 years) as some refurbishment would be required at a later stage as opposed to the major scope which had them included.The discount rate had the largest impact on the result, however, did not alter the comparison of the two refurbishment options.The timing of the second renovation brought the NPV of the two options the closest, however, did not alter the comparison either.The sensitivity analysis is included in Appendix D.
An uncertainty relating to the social impact is that the study estimates the intended or expected impact, as opposed to the actual impact.As the project was currently underway during the study it was too early to assess the actual impact.

Results
The results section follows the framework by Manninen et al. (2018).First, the six value propositions are defined, followed by identification of key stakeholders.The impact assessment includes space efficiency, vacancy rate, circular activities, waste generation, lifecycle carbon, lifecycle energy and lifecycle profit.A summary of the impact assessment concludes the Results section.

Definition of value propositions
Based on the interviews, site visits and document review, six central value propositions have been identified for the project organization.

Value Proposition 1: Extending the useful life of the building
The refurbishment of an existing building is seen as the ultimate circular initiative: "the most sustainable building is the one that is never built, but to refurbish and modernize without losing the history and cultural heritage value -that's real sustainability!"(Document 1).

Value Proposition 2: Stimulating circular activities
Reducing climate impact and implementing innovative circular solutions were the main foci of the project organization.Instead of concrete climate targets, a broader view of sustainability was adopted, to encourage circular activities in the future.

Value Proposition 3: Creating an industry benchmark
A climate impact assessment was to be conducted due to the lack of industry data, to be used for future benchmarking; "the idea is to consider the data in terms of using it for future procurement terms in regard to sustainability" (N1).

Value Proposition 4: Optimizing space use
Shared spaces were to be introduced to optimize space utilization and increase the number of people using the building, both simultaneously and at different times.

Value Proposition 5: Building a community
Both shared spaces and sharing services are believed to, not only have a positive climate impact, but also promote the building of a community.

Value Proposition 6: Climate conscious profit
A balance between cost and climate is advocated, trying to find cost neutral alternatives that have either a positive or a less negative impact on the climate.

Identification of stakeholders and their role
The core project group comprises the developer, architect, structural engineer and the construction management organization.Due to the complexity of refurbishing a 120-year-old building, where previous refurbishments were disorganized and undocumented, many unforeseen issues arose throughout the project.It was crucial for the success of the project that the core project group worked closely and efficiently together.The contract between the developer and the construction management organization was a turn-key contract, however, it was based on collaboration with clear incentives for smart and circular solutions.
Other key internal stakeholders include the endusers, or tenants.The main tenant of the building post-project is an architectural firm who were also the architects for the project.This made it easier to come to agreement of the terms of the tenancy contract.The architectural firm's motivation for both designing the project and leasing part of the building for their offices, was the value they put on environmental sustainability and cultural heritage.Organizations who were tenants prior to the project and who wished to return were able to provide ideas and suggestions for the project.The innovative circular activities also meant that end-users needed to agree to the discrepancies between standards and the actual building in their tenancy contracts; "Some things were needed to be agreed with the tenants as it did not meet regulations, it couldn't meet regulations.( … ) That's how you have to work with it, it's a different way of thinking, for all parts."(N1).
The process was made easier due to the architectural firm's double role.Since the factory closed in 1984, the building has been used by organizations in the creative industries who appreciate the low rents of the functionally obsolete building.There was an attempt to minimize the rental increase for existing tenants by forming smaller spaces, which would meet the tenant requirements but keep the total cost down.Regardless, not all tenants returned post-project.
The key external stakeholders comprise the authorities of the local municipality, who were involved through building permits.The permit process was complex due to circular solutions which had not previously been tested, for example, restored flooring which did not meet current standards regarding noise and surface.Due to the circular initiatives' untested relation to building permits and cultural heritage listing, a close relationship was formed with the municipality's building committee.To have an efficient dialogue an antiquarian specialized in cultural heritage was included in the project group.Their main task was to anticipate and facilitate issues which the municipality may have regarding the cultural heritage of the building.
The stakeholders are the same for both options.Figure 2 introduces the stakeholders.

Vacancy rate
Due to the low standard of the spaces the vacancy rate was steadily increasing and had reached 27%.The refurbishment project was to adapt the use from factory to modern, collaborative offices and studio spaces.The projection was that the minor refurbishment would result in a vacancy rate close to the long-term market vacancy rate of 7%, whilst the major scope would result in a vacancy rate of only 1%.

Space efficiency
Before and in the minor scope the number of seats is 283.This would go up to 567 seats in the major option.The area is 6800 m 2 in the minor option vs. 6582 m 2 in the major option due to upgraded building services decreasing the lettable area.The number of seats per area is 24 m 2 per person in the minor option, and only half of that, 12 m 2 per seat in the major option.

Circular activities
The circular activities for each scope are introduced and categorized according to the R imperatives introduced by Reike et al. (2018) in Table 1.Notably, many of the circular activities in the major option were aimed at reducing demand or consumption.However, the overall energy consumption did increase due to increased capacity for services such as ventilation to allow for spaces efficiency: "In our case the energy consumption went the wrong way due to the upgraded systems, especially ventilation, as more energy was used to heat and cool as spaces were used more efficiently and, in more spaces, than before the refurbishment" (N1).

Waste generation
The total demolition waste generation amounts to 134 and 309 tons for the minor and major scopes, respectively.Construction material waste for the major scope was 146% that of the minor scope with the largest reduction between minor and major scope being in plasterboards, which were mainly associated with tenant improvements excluded from the minor scope.Concrete, brick, wood and other combustible waste was also less in the minor scope than the major scope.Table 2 presents an overview of the waste generation.

Energy
The major scope increases capacity of some services, especially ventilation, to increase the space efficiency and allow more people to utilize a space.This leads to an overall increase in energy usage compared to preproject usage, which is offset by the introduction of solar panels.An overview of the results is presented in Figures 3-5.
The total energy consumption of the major refurbishment option is 3% higher than the minor option.Considering the energy production from the solar panels, the minor option is 11% higher than the major option.Since the minor option has a lower total energy consumption and a larger lettable area, the kWh/m 2 is lower for this option.Conversely, when looking at kWh/person, the major option is less than half of the minor option.

GHG emissions
The total emissions for the minor and major scopes are estimated at 948 and 1130 tCO 2 e, respectively.When the functional unit of per m 2 is adopted, the minor option has the least impact.If, again, the functional unit of per person is employed the results are inverted.An overview of the results is presented in Figures 6-8.
The product and use stage are the most significant for both the minor and major scopes.The use stage of the major scope is significantly smaller than the product stage in terms of emissions, whereas for the minor scope the two stages are close to even.This is due to the additional installations aiming at energy reduction included in the major scope, which result in higher product stage emissions but lower use stage emissions.Accounting for the onsite green energy production, the major option shows an overall lower impact in the use stage.

Lifecycle profit (LCP)
The minor scope is more cost-efficient than the major in the initial investment.The operational phase carries Reducing the demand for space through shared and collaborative spaces (collaboration spaces, social nodes, conference rooms, sanitation facilities).
x Sharing services Sharing services, such as, a bicycle pool, shared tools and digital solutions to enable sharing of goods and services. x

Energy reduction
The replacement of old radiators and installation of LED lighting.x x Energy reduction Automatic shading over windows to reduce the need for cooling in the summer, additional insulation to improve the thermal performance, AI controlled ventilation to improve both efficiency and comfort and colocated server rooms to reduce the need for cooling.Individually measured and charged energy to prompt behavioral changes.
x Energy peak management Connecting the building to the city network to act as a back-up.
x Water reduction Water consumption individually measured and charged to prompt behavioral changes.
x Resource reduction "It was very important to us to minimize … everything that is in an office.Normally you would fill the ceiling with installations and then put a false ceiling in, and we haven't done that here, instead we have tried to reduce the number of products" (N3).
x x Green mobility � Encouraging green mobility through bicycle stands, EV chargers and no car parks as part of the tenancy agreements.
x Green energy � Introducing solar panels and green district heating.Upgrading the building but keeping as much as possible intact.
x x

Repurpose
Repurposing materials Material was repurposed within the construction site, e.g., bricks from a demolished wall were reused in a load bearing wall which had several large holes.And now we get to reusing again with reused bricks.We tried to fix it (the wall) as it has once been.Not using too many new methods, but instead to make it work."(N3). x

Repurposing existing building
Existing building repurposed from factory to modern workspaces.
x x

Recycling construction and demolition waste
Recycling all possible construction waste including plastic, steel, cardboard.
x x

Recycling material and products
Collaboration with an upcycling organization who collected material and products from the site.Low CO 2 materials � Low climate impact materials Using lower impact products when new material was required, e.g., bathroom tiles and plasterboards.The reduced impact material was, however, to be cost-neutral or near cost-neutral compared to the standard material.
x  more costs than the initial investment, and the revenue potential during operations is largely determined in the initial investment.The LCP shows that the major scope has a higher NPV, despite the higher initial investment, due to lower costs and higher revenue in the operational phase, with the expected vacancy rate and the employed discount rate.A sensitivity analysis (see Appendix D) revealed that the major scope performed better in all scenarios with varying discount rate, vacancy rate and renovation cycle.Table 3 provides a summary of the NPV results.

Summary of results and evaluation of value capture
The previously untested circular initiatives required close collaboration within the core project group, as well as internal and external stakeholders.However, in line with findings by Olander (2007) the relative importance of the stakeholder groups differs, with the core project group holding the power to make decisions, however, the municipality also holds power to       make decisions regarding certain aspects relating to, for example, planning and cultural heritage.
The major scope performs better in terms of space efficiency and vacancy rate and comprises more circular activities.The minor scope has lower waste generation, lower CO 2 e/m 2 and lower kWh/m 2 (without deducting energy produced onsite for the major option).The major scope has lower kWh/person, lower CO 2 e/person and a higher NPV.A summary of the impact assessment results is presented in Table 4. Following, we discuss how well each option captures the intended value propositions.

Discussion
This study set out to contribute new knowledge on the impact assessment and value creation and capture of circular business models in the built environment.Next, the findings are discussed through establishing the value capture of each defined value proposition.

Value Proposition 1: Extending the useful life
Reusing, refurbishing and repurposing an existing building is a significant circular measure.The less intervention required, the more value is retained, and less energy and materials are wasted (Reike et al. 2018).From this perspective the minor scope is more circular in nature.Much of the higher waste generation, higher total and per m 2 energy, and higher total and per m 2 emissions of the major scope result from tenant improvements.These improvements were not needed to extend the building life as such, but rather to improve space efficiency, vacancy rate and rental revenue.The minor scope better captures value Proposition 1.

Value Proposition 2: Stimulating circular activities
A follow-up of increased circular activities has not been carried out.Nonetheless, stakeholders report increased knowledge of different circular activities and resolutions to unforeseen and foreseen issues, which they can take with them to future projects.The increased knowledge of circular activities will potentially lead to increased implementation of circular activities by these stakeholders.This value proposition requires common vision and a collaboration between stakeholders, in line with findings from C ¸imen (2021) and Leising et al. (2018).More circular activities were present in the major compared to the minor scope.The major scope better captures value Proposition 2.

Value Proposition 3: Creating an industry benchmark
An assessment of climate impact was conducted to be used to benchmark future refurbishments as per the value proposition.However, the effects of circular activities such as the reuse station, collaboration with upcycling organizations, reuse of materials in the building and the use of upcycled materials and products were not quantified, even though this would have provided valuable input for an industry benchmark.On the other hand, the inclusion of building services installations in the LCA, leads to more realistic results, as these are normally excluded (Moncaster et al. 2018).Installations made up 30% of the emissions of the major scope, and 24% of the minor

Value Proposition 4: Optimizing space use
The major scope includes space efficiency measures, which were excluded from the minor scope.Space utilization had a positive economic effect through increased rental revenue.Despite an increase in total energy use in the major scope, the energy use per person was lower.The findings are in line with findings by Francart et al. (2020), who also found total energy use went up with the sharing of spaces and more efficient space utilization whilst it went down when seen as use per person.The major scope better captures value Proposition 4.

Value Proposition 5: Building a community
The major scope included shared spaces to limit the environmental impact in the way of utilizing space more efficiently, however, also to create a community feeling, or 'tribe', as described by Kyr€ o and Lundgren (2022).This was in the major scope enforced by the tenants signing a so-called "sharing contract", expressing their commitment to sharing and the community.The minor scope did not include sharing activities.The major scope better captures Value proposition 5.

Value Proposition 6: Climate conscious profit
The organization aimed at cost neutral solutions with the least environmental impact.The added circular activities in the major scope led to value creation in terms of lower operating costs and higher revenue, referred to as shared value by Ritala et al. (2018).The space efficiency improvement in the major scope brought the largest profit despite the high initial investment.The increased rental revenue from improved space efficiency results in a higher NPV.The major scope better captures value Proposition 6.

Conclusions
In line with our aim, our contribution to the emerging field of circular business model evaluation is two-fold.We found the business model assessment framework by Manninen et al. (2018) to be well-suited for assessments in the built environment, when extended to include economic and social impact.The extended framework will be useful to both professional real estate developers faced with investment decisions, and academics engaged in impact assessment.We discovered that the major scope with a larger initial investment, captures more of the intended value propositions than the minor scope.Yet, we conclude that more circular activities do not necessarily equal better environmental performance, as the minor scope with smaller initial investment performs better in terms of total environmental impact.
Trade-offs in terms of total energy use and emissions, and between operational and embodied energy and carbon were also found and should not be overlooked.Typically, in new construction, the construction phase emissions are so significant, that even a zeroenergy building will not compensate for the embodied emissions during a typical building lifecycle of 50 years.However, adaptive reuse projects save much of the embodied energy and carbon by keeping the brick or concrete construction with the largest impact intact.Paradoxically, this increases the relative share of the use phase, making operational emissions relevant again.Adaptive reuse projects should seek to achieve energy reduction and space optimization in the new operational phase.Although this study has provided insights on the trade-offs, the complex relationship between embodied and operational energy in renovation and adaptation projects warrants further research.
We further conclude that the choice of functional unit is critical when performing building LCAs.We suggest that 'emissions per person' may be a more relevant unit than the traditionally used 'emissions per lettable area'.Alternatively, several functional units may be used to complement one another.A limitation in the study at hand relates to the number of people utilizing the building.The energy use and CO 2 e per person are calculated with the planned number of seats for each option, not actual utilization rate.Future research should focus on refining appropriate functional units, such as, 'emissions per hours in use'.
Not part of the R-imperatives introduced by Reike et al. (2018).

Figure 8 .
Figure 8.Total kg CO 2 e per person.

Table 4 .
Summary of results.