Multifamily real estate investment trusts (REITs) Essex Property Trust and UDR have announced the first closing of a new investment fund focused on environmental, social, and governance (ESG) innovations. RET Ventures ESG Fund, which will be managed by venture capital firm RET Ventures, will target $80 million in investor capital commitments and will seek to support the growth and implementation of ESG solutions for the housing industry.
According to the firms, an important goal of the fund will be to broaden the multifamily industry’s approach to ESG, with a holistic focus that addresses climate change and environmental risks as well as social issues, including affordability, building health and safety, and resident well-being. The solutions will feature technologies that aim to improve the environmental and social outcomes of new developments as well as existing properties. These may include platforms focused on improved building design, efficient waste management, the reduction of energy usage and carbon emissions, and ESG data collection and reporting.
“Taking a leadership role in this fund marks an important next step for Essex as we continue to expand on our decadeslong commitment to sustainability and investing in technologies that target an environmental benefit,” said Essex CEO Mike Schall. “We look for business strategies and products that focus on a quantitative and thoroughly researched approach to selecting social and environmental solutions. As a prominent provider of housing on the West Coast, Essex acknowledges its responsibility not only to shareholders but to its associates, residents, and communities to address the impacts of climate change, and we are eager to be a part of this joint approach to identify environmental and social technology solutions available to the multifamily industry.”
UDR chairman and CEO Tom Toomey added this fund should enhance the financial, environmental, and social dividends the REIT delivers to its shareholders. “UDR has achieved a variety of ESG milestones recently, resulting in the company being recognized by GRESB as the global sector leader as the No. 1 ESG performer across all listed residential companies,” he said. “However, we know more progress is needed, both at UDR and as an industry. With our investment in this fund, we aim to leverage the knowledge we’ve accumulated through years of ESG-centric work to accelerate the achievement of sustainable goals across the real estate industry.”
This fund marks the first vehicle solely targeting ESG-centric technologies for RET Ventures. However, it has demonstrated a commitment to sustainable innovation, such as leading an ESG working group made up of over 20 leading multifamily and single-family rental executives.
“The housing sector has a significant impact on society in terms of both its critical role in the lives of residents and its resource footprint. With this fund, we plan to invest in technologies that mitigate the environmental impact of real estate, while addressing other important social and stakeholder issues,” said RET Ventures partner Christopher Yip. “With a groundswell of support across the sector, there is an opportunity for purpose-driven technology to improve nearly every aspect of the industry—investment, construction, operations, and more—and we’re proud to be partnering with Essex and UDR to build toward a more sustainable future.”
With the initial closing of the fund, RET Ventures manages more than $375 million in committed capital. Several of the firm’s portfolio companies play a role in supporting positive environmental and social outcomes, including Conservation Labs, Falkbuilt, Juno, Measurabl, PassiveLogic, and SmartRent.
