01/30/2014 | by
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Rutgers Sustainability Researcher Sees Challenges for REITs

Jennifer Senick, executive director of Rutgers University Center for Green Buildings, joined REIT.com for a video interview at NAREIT’s 2014 Leader in the Light Working Forum in San Francisco.

The center conducts applied research using planned and existing green building projects.

Senick was asked to comment on the trends that she is seeing with regard to energy management systems and REITs’ ability to scale building efficiencies on a portfolio-wide level.

“In general, I’m seeing building owners recognize the value of either energy or sometimes environmental management systems,” Senick replied.

She noted that REITs face jurisdictional and organizational obstacles when scaling efficiencies to a portfolio-wide level. “REITs struggle with the fact that they’re participating in different markets, (with) different incentives,” she said.

Some major trends are putting people “over the tipping point,” Senick observed. These include developments such as mandatory disclosure laws, which require companies to start providing portfolio-wide information, and increased regulatory reporting at the state level.

Senick also commented on other broad challenges.

“You have different building code and other regulatory influences, and in some states or cities you have, on the flip side, incentives that are driving people to reinvest or invest in those assets in a different way,” she said.

Looking ahead, Senick said she expects to see an increased interest in portfolio performance outcomes.

“If at some point you have some high-performing assets and some really lagging ones, you’re still going to look smack average on that scatterplot of REITs, and that might not be where you want to be,” Senick said.