GRESB, the Global Real Estate Sustainability Benchmark, has released its 2024 data on environmental stewardship, social responsibility, and good governance for real estate. The GRESB Real Estate Assessment measures the sustainability performance of individual real estate portfolios based on self-reported data.
In 2024, 69 U.S. publicly-listed REITs participated in GRESB, representing 60% of equity market capitalization of the FTSE Nareit All Equity REITs Index. In 2024, 20 REITs achieved a GRESB score of four or five stars, with five stars representing the highest GRESB score. Participation in GRESB is strongly correlated with higher financial and operational performance among publicly-listed REITs.
The table above shows the 20 REITs that have achieved a GRESB star rating of four or five in 2024. Note that Apartment Income REIT is no longer publicly traded. Empire State Realty Trust, Inc. (NYSE: ESRT) is the top scorer for the second year in a row. The office sector dominates the top scorers, with only one diversified REIT, JBG SMITH (NYSE: JBGS) and one residential REIT, Veris Residential. Inc. (NYSE: VRE) earning five stars, which includes the top 20% of global participants.
The table above shows the breakdown by property sector of the 69 REITs that participated in GRESB in 2024. Only property assets classified as buildings are eligible for the GRESB assessment. The retail sector had the most participants at 15, followed by office with 13, and residential with 12. However, self-storage was the sector with the highest share of participants—four out of the five self-storage REITs in the Nareit All Equity REITs Index participated in 2024.
Office had the highest average score weighted by gross asset value at 88 points, followed by diversified with nearly 87 points. The lowest scoring sectors were lodging/resorts and retail, averaging 69 points.
A recent academic paper by Avis Devine, Nils Kok, and Chongyu Wang studied the relationship between participating in GRESB and positive financial outcomes, finding that REITs that have higher levels of sustainability disclosure have stronger financial/operational performance, even after controlling for observable factors. The study also finds REITs outperform private real estate in sustainability performance.