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ccfath

Benchmarking Green: The First Investable US Green Property Indexes for REITs - Forbes - 1 views

www.forbes.com/...een-property-indexes-for-reits

shared by ccfath on 30 Nov 12 - No Cached
  • 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.
  • 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
  • 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).
  • ...6 more annotations...
  • 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.
  • have recently been hearing more from our clients about which companies own LEED certified or Energy Star certified assets
  • 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.
  • This bold new initiative is a milestone product that should lead to significant opportunities for this participating in the growing market.
  • 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.
    • ccfath
      ccfath on 30 Nov 12
       
      Added Green REITs to list
Janine Shea

FTSE Group, USGBC, NAREIT Develop Investable Green Property Indexes - 1 views

www.reit.com/...le-Green-Property-Indexes.aspx

GroundUp Validation Investor_Demand REITs Metrics Green Market_Size_Growth

shared by Janine Shea on 30 Nov 12 - No Cached
  • “To date, no comparable benchmark has been available. We’ve already received expressions of interest from many large asset owners concerned about their exposure to a rapidly changing sector directly affected by the transition to the low carbon economy.”
  • The new indexes will be a milestone for real estate investment worldwide and will enable more real estate investors and managers to integrate sustainability factors into their strategies – both as benchmarks and as the basis for investment products.”  Rick Fedrizzi, President, CEO & Founding Chair, USGBC said, “Green building is a win-win, offering both environmental and economic opportunity. Greater building efficiency can meet 85% of future demand for energy in the United States and a commitment to green building has the potential to generate 2.5 million jobs. The sector has seen incredible growth and is projected to add $554 billion to the U.S. economy each year. This partnership creates significant investment opportunities for those ready to participate in this growing market.”
Janine Shea

The New Face of Tax-Deferred Real Estate Investing | Investing News | Print Financial &... - 0 views

www.thestreet.com/...11865267.html

Tax_Breaks Real_Estate Investing Trusts

shared by Janine Shea on 24 Jun 15 - No Cached
  • 1031 exchanges," after Section 1031 of the Internal Revenue Code
  • With this verdict, the court created a powerful wealth-building tool for real estate investors. No longer limited to transactions between two parties, investors could defer capital gains taxes on real estate sales as long as the proceeds were used toward the purchase of like-kind or "replacement" properties.
  • disallowed deductions for passive losses and eliminated accelerated depreciation. These restrictions made it unpopular for real estate investors to hold on to losing assets. As a result, 1031 exchanges into better quality properties emerged as one of the few tax-friendly options left for real property investors.
  • ...11 more annotations...
  • allowed tax-deferred exchanges for "tenancy in common" or "TIC" property transactions. Now 1031 exchanges were permitted not just for single-owner properties but also for multiowner, professionally managed real estate assets.
  • Between 2003 and 2008, Section 1031 investors poured more than $12.5 billion into various multiowner TIC properties ranging from shopping centers, office buildings, industrial buildings, apartments, and free-standing assets
  • With no available liquidity to fund like-kind property purchases, the 1031 market came to a screeching halt.
  • Delaware Statutory Trusts
  • DST deals are simpler for investors to understand, more nimble at critical life-cycle junctures, better suited to satisfy investor diversification needs, and, perhaps most importantly when it comes to putting a deal together, much easier for lenders to trust.
  • Centralized Management: In contrast to TIC, the DST structure puts all decision making in the hands of a trustee, centralizing the decision-making process. Furthermore, DSTs protect individual investors from personal liability and reduce deal documentation to a single agreement -- a trust agreement.
  • Smaller Investment Minimums: Although a TIC deal is limited to 35 investors, DST programs have no such mandated ceiling, with the only practical limit being that anything more than 2,000 investors triggers Securities and Exchange Commision reporting under the 2012 JOBS Act. As a result, TIC deals often have large minimum investments, whereas investors can buy into DST programs with smaller outlays.
  • Diversified Investments: Although TICs are constrained in the value of real estate that can be purchased by up to 35 investors, the pool of assets in a DST structure can be much larger. With more money available for investment, DSTs can afford to diversify assets.
  • Summing Up the DST Benefits: Simply put, an investor looking to do a like-kind property exchange gets a wealth of benefits under the DST structure. He enjoys the traditional tax deferral allowed under 1031 exchanges. Additionally, by executing a single trust document and for a comparatively small investment, he owns a piece of a diversified portfolio of real estate managed by a professional. And he is protected from personal liability.
  • For one thing, it mandates the unanimous consent of all owners for decisions such as property sales, refinancing and leases -- a management headache when there are many investors.
  • Similar to a public REIT, assets in a DST vehicle are not aggregated by blind pool methodology as they are in a non-listed REIT, but instead are specifically identified by a sponsor, and disclosed to all prospective investors.
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