Does anyone know of any decent-sized investors or operators/developers with a real focus on sustainable investment and development? I’m talking about real double bottom line focus, not just doing LEED to check a box for posterity. Things like advancing green construction techniques like using CLT, trying to get to carbon neutral or better, etc. RE is a major contributor to carbon emissions. Would be great to be able to marry the investing work I enjoy with a real mission, not just the almighty dollar.
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Maybe manufactured housing guys? I would start there if I was going to do research on this.
I have a feeling things like Clutter are going to combine tech/re are going to be the guys who can say they make a real impact by just utilizing space better, and that would be the green footprint RE firms strive for.
I know everyone makes RE LEED certified and takes "Green Loans" but it is just a requirement at this point, I would be very curious how anyone could really call themselves a green operator with statistics that show they are actually saving the environment vs the next guy and somehow keep cost in line.
Ehh or its WeWork self storage edition, but hey you could argue WeWork was "good" for the environment if people just shared office space so it didn't go to waste.
but Caveat emptor WeWork was probably the biggest "L" of the decade, and they were able to raise a bunch of capital on this idea.
The only way this works is if the equity comes from one guy who is willing to take lower returns for the warm and fuzzy. Any GP operator pitching lower returns in exchange for above market green projects is going to have a hard time finding LP money.
Look out west. In markets when a large amount of people care about it, groups like https://vulcanrealestate.com/</a">Vulcan will focus on it because the economic incentive is aligned with the environmental incentive.
Also look into smaller creative office developers and/or corporate headquarter developers. Often times it makes a lot more sense to focus on getting closer to net zero when you own the building or there's a single tenant.
Finally, some of it is just a matter of scale. Hines is going all in on their heavy timber construction. That's definitely a greener way to build, albeit not carbon neutral.
My advice would be to not try to be an absolutist. By all means find a firm that cares about what you care about, but sometimes them caring at all is enough, even if they don't care about it as much as you do.
+1 Was going to say this as well... Is this phenomenon exclusive to the west coast? (I operate out here and don't have as much exposure to other major metros). As you noted, I think that economic incentives are linked to environmental in a couple of ways: (1) big one is that a lot of companies (mostly high-tech but seems like others are on this as well) demand that their space be sustainable which drives up rents for green buildings. They're in a knife fight for talent and this is an issue that's important to their workforce so they have to be seen as doing everything they can to be sustainable. (2) Less direct, but it certainly helps in entitlement process if you are proposing a green building.
Last point is spot on. Being too focused on your one goal (whether that be profit on one end of the spectrum or sustainability on the other) is going to create problems finding common ground with counter parties who don't necessarily share your enthusiasm...
Most true affordable housing developers (those that work closely with municipalities, not people who buy housing that has below market rents) have a true double bottom line focus. By definition they've chosen a less lucrative business and most of them will tell you that for all the hard advantages that provides (lower risk, fewer equity requirements) one of the primary reasons they entered or stayed in that market was because it allowed them to make a positive impact on the lives of their tenants.
Unless by "sustainable" you meant environmentally.
Also check out GRESB - they rate industry participants by their focus on sustainability
This is mostly the domain of smaller, more boutique operators. This also tends to make it hard to find because these sorts of firms run lean and are already a niche anyway - it requires a principal who is passionately devoted to the cause.
Only exception I can think of is Margaret Anadu's group at GS, but they invest across verticals, so that might not be what you're looking for exactly. That said, that group is basically THE example of double-bottom line initiatives at BB / similar institutions.
Margaret Anadu's group at GS isn't a sustainable investment team but rather invests in projects that fulfill the bank's CRA requirements. Sometimes that means deals that are sustainable (i.e. environmentally friendly, but "sustainable" is not in and of itself the mandate.
Thanks all. Solid responses and some good leads.
If you are based in Europe, you should take a look at ICAMAP https://www.icamap.com/ and Woodeum
One of their fund focus on wood construction/project and they are specialized in low carbon buildings!
PM me, I can share a name privately (personal reasons I'd rather not share in the room).
Well that certainly doesn't help the forum whatsoever.
https://s3.us-east-1.amazonaws.com/hines-assets/documents/Hines-2018-Su…
Stream Real Estate in Seattle - small shop though https://www.streamre.com/
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