Increased ESG Investment Drove WashREIT’s Green Bond Expansion

WashREIT is expanding its green bond framework with $350 million in green bonds for eligible properties. The REIT will target BREEAM In-Use Very Good certifications for the assets, which include an eight-property apartment portfolio that WashREIT acquired in 2019. The move underscores increased commitment to ESG practices in the CRE industry and among REITs in particular.

“ESG is integrated into our mission and goals for the company as a whole, and we really have to live it in our operations and adopt it in all that we do for our stakeholders, both our investors and our residents,” Steve Riffee, CFO at WashREIT, tells GlobeSt.com. “To be responsible stewards of our investors’ capital, we believe that aligning our ESG objectives with investors that really value ESG is the right thing to do.”

There is increasing support for ESG investment, and investors are looking for partners that are committed to achieving high operating standards. “Portfolio managers and stewards of capital are being held more accountable for their ESG-oriented investments,” says Riffee. “We have been applauded by both equity and debt investors for continuing to up our game in this way. It really matters, and they tell us that it is going to matter more and more.”

WashREIT chose the BREEAM certification because the platform aligned with the company’s high-bar goals but also because it infused transparency into the process. “We are committed to operating our portfolio at a high sustainability standard, and BREEAM is a great way for us to systematically bring our new portfolio up to WashREIT’s standards. BREEAM’s residential end-use specifics aligns really well with our sustainability priorities,” Riffee says. “It requires a third-party assessor to conduct onsite verification, which adds to the rigor of our commitment and it stands the scrutiny of investors when we talk to them about our program.”

WashREIT is planning to expand its multifamily and value-add investment platform in addition to renovating existing buildings to meet its standards. “We wanted to bring these buildings up not only to our operating standards but also to our ESG standards. It made sense for us to match the capital that is interested in doing the same,” says Riffee. “Through the certification, we are going to benchmark performance across a range of important categories, including energy efficiency, water use, waste and resource conservation and transportation. These are already categories that we are promoting throughout our portfolio. The comprehensive nature of BREEAM aligned well with our objectives.”