JLL Income Property Trust, Inc. (Income Property Trust) has adopted a two-pronged approach to bolstering the sustainability of its portfolio by taking a close-up look at the many of the largest assets in its portfolio.
Income Property Trust has conducted 19 energy audits for office and multifamily properties, and 27 Building Research Establishment Environmental Assessment Method (BREEAM) assessments for industrial and retail properties.
Elena Alschuler, Americas head of sustainability at LaSalle Investment Management, the advisor to the public non-listed REIT (PNLR), says the audits and assessments provide “valuable insights into building conditions, current performance, and potential improvements.”
Armed with the audit and assessment data, covering about 40% of Income Property Trust portfolio’s square footage, the PNLR is fashioning a sustainability plan for each property that was studied. Income Property Trust’s roughly $6.6 billion portfolio of equity and debt investments includes apartment, industrial, grocery-anchored retail, and health care properties.
“As fiduciaries, we remain focused on sustainability as a means to manage risk and drive financial performance,” Alschuler says. “Therefore, Income Property Trust examines a range of factors related to resource use and climate risk for each asset, and initiates plans that aim to take advantage of potential opportunities and mitigate identified risks.”
Income Property Trust’s attention to resource use and climate risk led to it receiving the inaugural Nareit 2024 Leader in the Light Award for PNLRs. The awards program honors REITs’ leadership in carrying out sustainable and socially responsible investment and operating practices, good governance, and transparency.
Alschuler says Income Property Trust continues to refine the process for conducting property audits and assessments, and for developing asset-specific sustainability plans. The overall goal is to drive value through moves such as a reduction of operating expenses and risks, creation of income from onsite solar installations, generation of more tenant revenue, and compliance with building performance standards.
Influencing the broader market
Alschuler goes about her work at Income Property Trust against the backdrop of concerns over climate change. “I wanted to build my career around a big, impactful problem that hadn’t been solved,” she says.
Alschuler was first exposed to this problem while working at a real estate and economic development consulting firm in New York City. There, she realized that by concentrating exclusively cost savings, the real estate industry was overlooking other ways that sustainability could affect a property’s cash flow.
“I also saw that public policy and market demand would be likely to shift over time as well,” Alschuler explains. “So, I decided I wanted to become an expert in the data, finance, policy, and implementation of efficiency in existing buildings.”
With that in mind, she has pursued roles in the consulting, federal government, and tech sectors — and now at Income Property Trust and LaSalle — that have supplied different perspectives on sustainability.
“LaSalle’s size and sophistication mean we can both achieve competitive advantage and also impact the broader market,” she says. “We can move the needle on a big portfolio and hopefully help create best practices and benchmarks that others can use as well.”
Alschuler’s movement of the sustainability needle has paid off personally. In 2024, she received Nareit’s 2024 Sustainable Leadership Award, the award recognized her contribution to the REIT industry as chair of the CRREM (Carbon Risk Real Estate Monitor) North America Working Group.
“I think the real estate industry sees value in shared, voluntary energy efficiency and other sustainability pathways as benchmarks to assess and prepare for building energy performance and related risks, while identifying opportunities for outperformance,” she says.
Related Content:
Allan Swaringen, president and CEO of JLL Income Property Trust, recorded a video interview during Nareit’s REITworld: 2024 Annual Conference in Las Vegas.
Elena Alschuler recorded a video interview at Nareit’s REITworks: 2024 Sustainability & Social Responsibility Conference, held in McLean, Virginia.