In this episode of the REIT Report special series “Building to Zero,” Elena Alschuler, head of sustainability, Americas, LaSalle Investment Management, shares how the U.S. real estate industry has advanced the discussion on future planning for energy investments and reducing building-related carbon emissions. 

Elena Alschuler, head of sustainability, Americas, LaSalle Investment Management, who recently served as the working group chair for the CRREM North America project, joined

this final episode of the REIT Report special series focused on building on the real estate industry's journey to reduce emissions from the built-in environment to zero. She shares her experience in engaging the U.S. real estate community in a deep and thoughtful discussion around the CRREM Framework’s approach and methodology for measuring transition risk to institutional real estate portfolios. 

Alschuler shares how “a couple of years ago, a lot of investors were starting to look at these CRREM curves, and we liked the idea of having forward-looking targets to benchmark against in terms of planning energy and carbon performance. But when we started looking at portfolios against this particular set of curves, many of us were getting crazy results. So, twelve [U.S. and Canadian] real estate companies, including LaSalle, decided to co-fund a ULI working group, which was supported by the CRREM team in Europe, to do industry engagement and Larence Berkely National Labs (LBNL) to do the technical work.”

Cedrik Lachance, director of research at Green Street, was a guest on the latest episode of Nareit’s REIT Report podcast. He discussed key priorities for the REIT sector, opportunities for growth, valuation levels, IPO prospects, trends in Europe, and more.

Lachance said that with the REIT market bestowing “pretty meaningful premiums in some sectors, we expect to see a fairly aggressive deployment of capital” from companies in the data center and health care sectors, self-storage, and to some extent retail. He added that there are also companies in the office sector trading at premiums to NAV and “that's going to influence how they allocate capital.”

Green Street sees the strongest rent growth potential in data centers. “That story has been well told, but it remains an area where we think there's meaningful upside,” Lachance said.

Doug Weill, managing partner at Hodes Weill and Associates, was a guest on the latest episode of the Nareit REIT Report.

Hodes Weill recently released its 2024 Real Estate Allocations Monitor which showed that about 39% of institutions actively allocated capital to REITs in 2023, compared with 36% the prior year. Sovereign wealth funds were “meaningfully more active,” Weill said. “I think this is an ongoing trend where institutions are increasingly active out of their real estate allocations in REITs. And REITs are increasingly a complement to private market investments.”

About 67% of institutions indicated that liquidity is one of the key reasons why they invest in REITs, which was up from about 46% the prior year.

Andrew Alperstein, real estate partner at PwC, was a guest on the latest episode of Nareit’s REIT Report podcast. Alperstein said a key theme from the PwC/Urban Land Institute Emerging Trends in Real Estate® 2025 report is that commercial real estate is at the outset of a new cycle, one that is likely to result in increased activity and improved momentum in the year ahead.

“We were pleasantly surprised and pleased to see an improvement in sentiment as we looked at our 2025 publication relative to 2024 and 2023,” Alperstein said, “particularly given we've had a challenging couple of years with higher interest rates and really a lack of transaction activity.”

Alperstein added that the interest rate environment forms “a very important piece of the momentum that we hope to see going into next year.”

In this episode of the REIT Report special series “Building to Zero,” Duane Desiderio, senior vice president at the Real Estate Roundtable (RER) shares a recently released 20-point policy guide which outlines lessons learned from the building owner perspective over the past seven years since the first building performance standard was implemented in 2017. 

Since Local Law 97 was passed by the City Council in New York City as part of the Climate Mobilization Act in April 2019, commercial building owners in the United States have experienced the rise in regulations know as Building Performance Standards (BPS), which are intended to regulate the use of energy in existing buildings. Buildings owners are currently navigating a patchwork of law with various rules, processes, and compliance pathways in cities and states across the county.

“A good way to start the conversation is by drawing a bit of a contrast to the climate and energy policies on buildings that we've seen come from the federal level, where the emphasis has been on carrots not sticks, incentives to encourage buildings to push the envelope to reduce emissions to become more efficient. At the state and local level unlike the federal level, these BEPS laws would impose mandatory limits on buildings to either reduce their energy by certain amounts every year or to reduce their carbon emissions every year or in some cases both.”

Sally Ann Flood, vice chair and U.S. real estate sector leader at Deloitte, was a guest on the latest episode of Nareit’s REIT Report podcast. She reviewed highlights of the firm’s 2025 commercial real estate outlook, which indicates that next year could be a potential turning point for the sector.

“After two consecutive years where most survey respondents expected revenue declines, this year 88% of global respondents now report they expect revenues to increase going forward,” Flood said.

Jacob Rowden, senior manager for U.S. office research at JLL, was a guest on the latest episode of Nareit’s REIT Report podcast. He noted that within the last year, a top-down recovery has been evident in the office sector that is now beginning to spill over more broadly.

Rowden noted that factors supporting a more positive direction for the sector include employees spending more time in the office, a lack of new construction, and a record volume of office inventory being removed for conversions or redevelopments to other property types.

Jeremy Banoff, vice chairman of Ferguson Partners and co-leader of the firm’s Compensation Consulting group, was a guest on the latest episode of the Nareit REIT Report podcast. Banoff discussed some of the key findings from the 2024 Nareit Compensation & Benefits survey, which is conducted by Ferguson Partners and sponsored by Nareit.

The participation rate for this year’s survey represents approximately 72% of the U.S. listed equity REIT industry’s total market capitalization.

This year’s survey showed a slight downward shift in voluntary turnover levels. Banoff explained that in the past few years, the baseline has been relatively higher, with “the pendulum tilted toward employees.” That’s now started to stabilize, with the pendulum swinging back toward employers, he said, although “not all the way.”

Brandon Pizzola, economist in EY’s Quantitative Economics and Statistics (QUEST) practice, was a guest on the latest episode of Nareit’s REIT Report podcast. Nareit commissioned EY to estimate the economic contribution of U.S. REITs in 2023, the most recent year of complete information. The data showed that REITs supported an estimated 3.5 million full-time equivalent (FTE) jobs and $278 billion of labor income.

“The one thing to flag is that REITs continue to grow,” Pizzola said. He pointed out that in 2021, the economic footprint of REITs was 3.2 million FTE jobs, with that number growing to 3.4 million in 2022, before rising again in 2023. The data encompasses public listed, public non-listed, and private REITs.

Todd Kellenberger, REIT client portfolio manager at Principal Asset Management, was a guest on the latest episode of Nareit’s REIT Report podcast. Kellenberger discussed how REITs are likely to perform amid either an economic soft landing or mild recession, as well as the impact of lower interest rates on the sector.

“The general trajectory of where markets are headed is favorable for real estate,” Kellenberger said. He noted that the Federal Reserve is seeking to ease monetary conditions to avoid an economic hard landing, “and that will importantly bring down the cost of capital for real estate and likely bring a recovery to property values.”

Mike Acton, head of research at AEW Capital Management, was a guest on the latest episode of Nareit’s REIT Report podcast.

Acton discussed the broader macro backdrop for commercial real estate. While markets are excited about the prospect of interest rate cuts, that sentiment is set against concern about potential recession and possible policy changes after the election. “It's a little bit of a mixed bag as far as the broader outlook goes.”

During the interview, Acton also noted that at this stage, most investors have rebalanced their portfolios along property sector lines. Going forward, it's likely going to be less about what specific property sectors investors are targeting and probably a lot more about the quality of the individual properties and locations. “Micro locations are becoming much, much more important in the investment decision than say market decisions,” he said.