Green Real Estate Investment Trusts

April 22, 2010

By Jeff

As I discussed in my last post, the green market still seems to be pretty volatile. With so many emerging companies and technologies, it is hard to invest with little risk unless you put money into green bonds or find a way to diversify your investments. However, outside of investing in sustainability focused companies, another option is to invest in a portfolio of green property.

Basically, a real estate investment trust (REIT) is a similar option to mutual funds, but instead of the portfolio consisting of companies, they consist of real estate. With how much of a focus is being put into green development (such as through the LEED certification system) this seems to be like another rapidly expanding option. Like investing in green bonds or other green investments, green REITs help encourage the creation of green buildings by moving more capital into the market.

This is also another way to diversify investments in sustainable technology. For example, there are various options available to the homeowner in terms of upgrading the house to become environmentally friendly. If the initial costs of this type of investment are too high, or it is too difficult to choose where the money should be invested, the green REIT offers a method of investing the money in a more diverse portfolio of properties that all meet certain requirements.

This is still very general information at this point, but I just wanted to start with a brief overview of some of the primary types of green investing. The more I read, the more excitement I see about investing in this market because not only is currently showing some impressive returns (in specific situations of course), but it also contributes to a cause important to a large portion of the world right now.

The benefits of building green buildings has been shown to be both good for the environment as well as for business, so it is difficult to imagine these practices not seeing widespread implementation as the wealth of new companies make them even more accessible. As with the rest of the green investments it is hard to say how the green real estate investment trusts will behave, but it is definitely another interesting part of the market to keep an eye on; and hopefully they will continue to allow investors to show developers how important sustainable development has become.

Photo Source: Jeremy Levine Design

Tags: Green Investing, Green REITs, LEED, real estate, real estate investment trust, sustainable buildings