Five Green REITs
by Tom Konrad Ph.D., CFA
Why Untried Buildings are Profitable Buildings
Buildings are responsible for approximately a third of greenhouse gas emissions, so making buildings increasingly efficient and switching them to renewable sources of energy is an essential part in addressing climate change.
Fortunately, new technologies such as unprepossessed climate heat pumps, heat pump water heaters, induction stoves, as well as the overly falling forfeit of renewable electricity and improvements to insulation and towers envelopes often provide opportunities to modernize buildings while achieving extremely lulu investment returns from the energy and maintenance savings alone.
Because of the unconfined financial returns, towers owners who recognize and implement these opportunities are likely to be at a competitive wholesomeness to those that protract with merchantry as usual. They will moreover be largest prepared when governments require towers owners to reduce greenhouse gas emissions as part of their own environmental efforts.
Real Manor Investment Trusts
Stock market investors can invest in real manor through a large number of publicly traded Real Manor Investment Trusts, or REITs. Due to their special tax status (REIT income is not taxed at the visitor level if at least 90% of it is distributed to investors), REITs moreover often have relatively upper dividend yields, making them lulu to income investors.
Nearly every REIT on the stock market has a sustainability page touting its untried towers achievements. Unfortunately, often this is just greenwashing: highlighting a sustainable project or touting efforts to engage with tenants on renewable energy while standing with merchantry as usual wideness the rest of the portfolio.
But this is not true for every REIT. There are REITs that have made strong untried commitments, and have the track records to when them up.
REIT Industry ESG Report
To help me identify some of these truly untried REITs, I started with the REIT Industry ESG Report 2022 published by the REIT sponsorship organization, Nareit in July. Since Nareit is an sponsorship organization, we can’t expect it to publish an industry untried ranking which might upset lower-ranked REITs, but it does contain 15 specimen studies.
I went through these specimen studies, searching for inveigling whoopee on climate change. I eliminated the ones that focused on single buildings, or on social issues (the “S” in ESG). Of the ones that were left, here are the ones that seemed to be single-minded to greening their unshortened property portfolios. I’ve written some short notes on the untried efforts highlighted in the specimen studies, and included the page number in the REIT Industry ESG Report so you can read and decide for yourselves.
- Rexford Industrial Realty (REXR, p.36) While this REIT is short on its list of achievements, it seems to be incorporating the environment in visualization making processes.
- American Tower Corp (AMT, p.57) The REIT’s merchantry of sharing space on liaison towers has a lot of inherent sustainability. On top of this, they have significant fossil fuel usage reduction achievements and goals.
- Federal Realty Investment Trust (FRT, p 60) I have mixed feelings well-nigh this one… It does not build on greenfields (sites which had not been previously built on- a very important step) but makes no mention of energy usage at its properties.
- Iron Mountain (IRM, p.62) – Has a very strict hour by hour wipe energy sourcing goal which will likely momentum innovation, plus a visitor wide process of energy use wringer and reduction.
- Prologis (PLD, p.66) – visitor wide transferral to untried certifications on all new and redevelopment projects.Uses low stat towers products, and adopts energy reducing tech and renewable energy on its buildings.
There Are More
Note that this list is far from comprehensive… it’s just the five most inveigling examples highlighted in the Nareit report. Many other untried REITs exist… my personal favorite stuff Hannon Armstrong Sustainable Infrastructure (HASI).
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DISCLOSURE: Long HASI. A family member owns PLD.
DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results. This vendible contains the current opinions of the tragedian and such opinions are subject to transpiration without notice. This vendible has been distributed for informational purposes only. Forecasts, estimates, and unrepealable information contained herein should not be considered as investment translating or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
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