Responsible Private Equity Real Estate Funds

by Andrew Moylan

  • 30 Oct 2009
  • RE

The third quarter of 2009 saw the three funds specifically focused on making environmentally or socially responsible real estate investments reach a final close, suggesting this may be one of the more appealing strategies to investors in the current market. Principal Real Estate Investors raised $214 for Principal Green Property Fund I, which focuses on the acquisition and repositioning of existing properties to LEED (Leadership in Energy and Environmental Design) certified status, as well as ground up development. JP Morgan Asset Management raised $182 million for its Urban Renaissance Property Fund, which makes investments in US properties that incorporate energy efficiency and other environmentally friendly strategies. It also targets socially responsible investments in workforce and affordable housing. Rose Smart Growth Investment Fund I, managed by Jonathan Rose Companies, invests in office, retail, multi-family and mixed-use sectors and will be environmentally responsible when improving the properties it has purchased.

There have been nine environmentally or socially responsible private equity real estate funds which have closed to date, raising an aggregate $1.5 billion. There are also a further nine funds in market targeting responsible investments, seeking commitments of $2.2 billion. These include the Canyon-Johnson Urban Communities Fund, which is targeting $500 million to acquire rental and mixed-use properties in urban communities across the US, and Bond Companies Sustainability Fund, which is targeting $350 million to develop and reposition urban infill properties using sustainable building technology and management practices.

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