Real Estate Impact Investing
Real Estate Impact Investing is a subset of Impact Investing, focused solely on investing within the Real Estate asset class. The primary goal of Real Estate Impact Investing is to invest in real estate assets that can simultaneously achieve financial returns with measured environmental and social impact. There are various strategies within Real Estate Impact Investing, including Green Real Estate, Affordable Housing, and Sustainable Communities.
- Green Real Estate strategies concentrate on applying environmentally sustainable principles into their projects. The goal is to deliver a real, physical asset that outperforms today’s building standards for energy efficiency, water efficiency, reduced waste and safe housing. Green Real Estate investing achieves environmental impact.
- Housing Affordability strategies concentrate on maintaining the affordability of the as-built and future built environment. The goal is to provide a housing supply to an underserved portion of the population. Affordable Housing investing achieves social impact.
- Sustainable Community strategies concentrate on designing and building real estate assets that serve as a foundation for neighborhood growth. The goal is to deliver projects that are designed with the local community’s input, provide central congregation areas for public interactivity and serve certain essential needs of the neighborhood. Sustainable Community investing can achieve both environmental and social impact.
In additional to financial investment return, Real Estate Impact Investing often derives a more tangible and scalable environmental or social impact than other Impact Investing asset classes as successful projects provide a direct benefit to the users of the asset as well as the asset’s surrounding environment on a daily basis.
- Financial Impact can be achieved by meeting target risk-adjusted investment returns.
- Environmental Impact can be achieved by improving energy efficiency; using renewable energy sources; improving water efficiency; reducing waste generated and improving the safety of as-built assets, among others.
- Social Impact can be achieved by supplying affordable housing; delivering community destinations; partnering with the community to support the culture of the neighborhood; providing convenient healthy food options; providing health and fitness areas; and supporting and promoting small, minority and women-owned business.
- Transportation Oriented Impact is a blend of environmental and social impact and can be achieved by promoting public transportation options such as Metro rails, bike-ability, and walkability; embracing current and future innovations in transportation; and solving first-last mile solutions.
APPA & Impact
APPA’s investment approach capitalizes on our local market expertise while strictly adhering to a distinct investing criteria. We Target & Acquire compelling opportunities by crafting opportunistic investment strategies driven by the unique local forces in Los Angeles and San Francisco Bay Area. Then, Improve the Asset to create value, focusing on the development and stabilization of three project types: Ground-up or Value-Add Development, Transportation Oriented Communities, and Value-Add Multi-Family. Through every phase of an APPA project, it’s our priority to Make an Impact.
Measuring the non-financial impact of a real estate asset can be challenging as Impact Metrics are relatively new to the investment landscape. Some Real Estate specific metrics can be found in the following frameworks: