ABSTRACT

Green Real Estate Investment Trusts (REITs) remain a somewhat arbitrarily defined group that could include a variety of certifications or features. Green REITs may not always exhibit abnormal returns or higher market capitalizations relative to net asset value, but they do tend to exhibit less volatility in returns. There is some evidence that the market values these lower risk returns and or the socially responsible aspect of green efforts. REITs must decide whether to go for building level certifications like Energy Star, LEED or BREAM, as well as the newer WELL designation. There are also various carbon based initiatives from GreenPrint and others, and portfolio level designations like GRESB. The proliferation of so many over lapping standards as these and others might be an obstacle to broader market transparency on the sustainability of a REIT portfolio comprised of several different certification proportions. Eventually the market will become more standardized in how green is measured and more REITs will go green.