We are so excited to host Sam and Sarah Adams from Vert Asset Management as our guests for next week’s Sustainable Living Webinar! Vert Asset Management is a global sustainable real estate fund, and Sam and Sarah are passionate about environmental sustainability and the possibilities and promise of sustainable investing. Before we tackle the issue of how climate change will affect real estate investing, let’s dive into REITs (pronounced “reets”) – real estate investment trusts.
What is a REIT?
According to the National Association of Real Estate Investments Trusts (Nareit), a REIT is “a company that owns, operates or finances income-producing real estate. REITs provide an investment opportunity, like a mutual fund, that makes it possible for everyday Americans—not just Wall Street, banks, and hedge funds—to benefit from valuable real estate, present the opportunity to access dividend-based income and total returns, and help communities grow, thrive, and revitalize.”
You may have noticed real estate funds as part of the asset mix in some of your retirement accounts. REITs are securities that sell like stock on the major exchanges and invest in real estate directly, either through properties or mortgages. A REIT mutual fund owns numerous publicly traded REITs. Equity REITs invest in and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their properties’ rents. Mortgage REITs deal in investment and ownership of property mortgages. These REITs loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans. Hybrid REITs combine the investment strategies of equity REITs and mortgage REITs by investing in both properties and mortgages.
If you don’t know a lot about these investments you are not alone. Although REITs date back to the 1960’s they have only matured as common investment vehicles in the 1990s.
We hope you can join us Wednesday, June 23 at 11:00am for what is sure to be an informative and inspiring conversation about climate change and sustainable investing.
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Heather is a Certified Financial Planner, Wealth Advisor, and Managing Partner at Willow Creek Wealth Management. Willow Creek is a fee-only financial planning firm in Sonoma County, CA serving clients throughout the San Francisco Bay Area and across the country. Willow Creek offers comprehensive financial planning encompassing investment management, retirement planning, tax planning, charitable giving, sustainable investing, and more.