Ideas for Impact/ESG real estate investing?

Investments are an implicit vote that a particular project deserves to be funded, even if investors don’t always think about it that way. When it comes to Real Estate investments, that means investors can play a role in directing resources toward the kind of projects they want to see in a particular area, even if that means accepting a (potentially) lower return.

The folks at EquityMultiple (YieldTalk Review here) just published a nice piece on “ESG” investing in real estate:

As a business strategy, ESG can mean taking advantage of tax incentives (local or federal) to create compelling bottom-line returns. Alternatively, sponsors may opt for adaptive reuse of obsolete or under-water assets. Example projects include converting a mall that would otherwise have been abandoned; and upgrading aging Class B or Class C apartments to be safer and higher quality for working families.

Two other options that come to mind for Real Estate impact/ESG investing are:

  • SmallChange (YieldTalk review here), which funds community-oriented projects like affordable workforce housing
  • AHP Servicing (YieldTalk review here), which buys up underperforming mortgages and explicitly tries to work with the homeowner to help them stay in their home

Anyone have experience with impact/ESG real estate investing to share?

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This an interesting topic. I not thought to tie ESG with real estate investments but it makes sense. I’d love to hear what other have to share on the options.