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How ESG Investing will Forever Transform Commercial Real Estate

Today’s investors are more socially conscious. This could have lasting implications for CRE.

July 2, 2021

If you care about the social and environmental impact of your investments, you’re not alone.

Whether supporting “green” companies or ones that treat their employees well, today’s socially conscious investors are considering more than just traditional financial metrics in evaluating opportunities. This trend toward environmental, social, and governance (ESG) investment criteria is more than just a fad, and COVID-19 appears to have accelerated this long-term paradigm shift as inflows increased by billions of dollars during the pandemic.

ESG investing is about more than just feeling good. It’s about another kind of “green”—money. From individuals investing a few hundred dollars through retail trading apps to institutional asset managers handling billions, people are finding there is money to be made through an ESG-friendly approach.

This collective embrace of ESG criteria will have major implications for commercial multifamily real estate investing.

Bringing ESG to CRE

Mixed-use apartment properties and other such developments have a massive role in our daily lives, and more people are starting to appreciate it—especially thanks to COVID-19 and the rethinking of our work and home situations.

There is a generational component to it as well. Millennials and Gen Z, which are already considered the most environmentally conscious generations to date, care deeply about investing responsibly as well as changing day-to-day habits to be more sustainable. For example, unlike past generations that embraced suburban sprawl, young people are realizing multifamily real estate in dense, walkable areas provides greater long-term sustainability.

In turn, commercial real estate developers are adapting by reducing the carbon footprint of buildings. Social and environmental impacts are being considered in public spaces, affordable housing, green buildings, multi-tenant shared spaces, and the renovation of underused assets. The YIMBY movement is taking hold. 

There is a sort of flywheel effect as developers create more environmentally friendly footprints, investors respond with their dollars, and tenants opt to live in ESG-friendly communities. From a resident’s perspective, it makes sense: you want to invest in a building that has a strong management team, boasts satisfied residents, and is within a strong broader community.

This ESG push into CRE will quite literally change the look and feel of our communities. It is not an exaggeration to say there has never been a more exciting time to invest in this space.

We believe that everyone, regardless of economic status, should be making investments that align with their values. That's why we're leading the way to bring ESG investment—and ownership—to multifamily commercial real estate.

No more expensive fees that act as barriers to investing. Instead, we're empowering everyday people—not just wealthy “accredited investors”—to vote with their wallets.

We all deserve a voice in creating a more sustainable and equitable future. As the investment landscape becomes more socially conscious, we need a way to support responsibly developed multifamily projects that enhance our communities. And ownership is the ultimate voice.

Read more about how Rhove is revolutionizing the way we invest in our communities, and download the app to get early access to investment with Rhove. Explore properties, connect with others and experience a whole new kind of ownership.

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