Does Increased Investment in Responsible Properties Lead to Better Corporate Performance?

Karen McGrath
Authors registered in the RePEc Author Service: Karen Mitchell McGrath

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the impact that ownership of eco-certified properties has on the corporate performance of U.S. REITs. Given the financial benefits associated with individual eco-certified properties, ownership of such properties within an overall real estate portfolio should translate into better corporate operational performance. Utilizing OLS with robust standard errors, we analyze the 2011 property holdings for 66 U.S. equity REITs to determine the effect that LEED and Energy Star property ownership has on each firm’s funds from operation (FFO), and return on average assets (ROAA) in 2012. Indeed, we found that ownership of LEED certified properties had a positive impact on both FFO and ROAA, with ownership of Energy Star properties positively effecting FFO only.

Keywords: sustainability; property investment; responsible investing; eco-certified; green labels; REITs (search for similar items in EconPapers)
JEL-codes: G00 R0 R00 (search for similar items in EconPapers)
Date: 2014-04-30, Revised 2014-08-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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