Benchmarking Green: The First Investable US Green Property Indexes for REITs - Forbes - 1 views
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FTSE Group, NAREIT, and the U.S. Green Building Council (USGBC) recently announced a jointly developed green property index for both institutional and retail investors. This first of a kind index was a collaborative effort bringing together global market leaders in US real estate indexing, REIT market expertise, and environmental building standards.
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The indexes, currently in the final stages of implementation, will give investors a structured and disciplined way to measure and model the risk and reward profile of green property, using the first codified, transparent definition of listed green property. In addition, the indexes will also provide investors with new ways to incorporate principles of sustainability into their property selections and portfolios, and access this investment theme through index-linked financial products
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owners include many of the largest green portfolios, measured as the estimated share of total portfolio value that has either LEED or EnergyStar certification. Just a few of the representative green indexed REITs include Douglas Emmett (DEI), Government Properties Income Trust (GOV), Piedmont Office Realty Trust (PDM), Boston Properties (BXP), Franklin Street Properties (FSP), Brandywine Realty Trust (BDN), Vornado Realty Trust (VNO), SL Green Realty (SLG), Ashford Hospitality Trust (AHT), Kilroy Realty (KRC), Washington REIT (WRE), and Cousins Properties (CUZ).
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Seems like NAREIT and FTSE are launching these indices in response to investor demand for a new benchmark and new investment vehicles that reflect interest in sustainable real estate projects.
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have recently been hearing more from our clients about which companies own LEED certified or Energy Star certified assets
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Because of the growing demand for investors seeking to understand how their portfolios will be affected and how they can reduce their risk, the new green property indexes should be well received for institutional investors.
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This bold new initiative is a milestone product that should lead to significant opportunities for this participating in the growing market.
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Academics have been finding that green-certified properties outperform otherwise similar non-certified properties with higher rents and higher occupancy rates, but until now there’s been no way for any investor to take advantage of that outperformance except to buy the buildings themselves or to do immense research into which REITs own green portfolios. We’ve essentially done the background work that makes it possible for investors to participate in the greening of the real estate market.
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