Climate Alpha REITS

Constructing Alpha REITs in a Climate Disrupted World

Climate Alpha’s product suite guides clients to construct climate-proof REIT portfolios: – the alpha REITs of a climate disrupted world. As climate-driven volatility increases, we believe there is a significant opportunity to create a unique and differentiated investment portfolio that capitalizes on mispriced real estate assets while also steering the market towards opportunistic investments with longer time horizons. REITs are a crucial asset class at the intersection of private, illiquid real estate and public, liquid securities. Today’s combination of higher interest rates and climate risk is significantly correcting real estate values across North America. This complex new structural environment suggests that today’s REIT dividends may not be a good predictor of future value. At the same time, a smart REIT strategy can substantially outperform a bearish real estate market.
Climate Alpha hedges accelerating climate change through anticipatory price discovery of resilient assets. We offer an opportunity to be a first-mover and market-maker in the resilient geographies of the future. Assets held in such portfolios will benefit from the growth of new demographic, commercial, and industrial hubs as economies gradually recenter away from over-priced and high-risk markets towards more stable and affordable locations. Real estate and infrastructure rank among the top sectors investors have identified as areas of opportunity amidst climate change.

Use Cases

  • Site identification and selection for new acquisitions
  • Investment research and strategy
  • Relocation strategy for housing, commerce, and industry

SPOTLIGHT:

Atlas Sustainable REIT Index

Using multiple datasets of REIT property locations, types, and market returns, we provide a quarterly valuation forecast for the Atlas Sustainable REIT Index that covers more than 200 REITs and 150,000+ properties. Climate Alpha’s interactive, customized dashboard allows Atlas Capital to sort and rank buildings according to our Climate Price™ risk-adjusted valuations under multiple scenarios as well as our location specific Resilience Index scores.
Portfolio Price Index
Portfolio Compound Annual Growth Rate (CAGR)

Climate Alpha REIT solutions include

(I) REIT Portfolio Analysis

Leverage Climate Price™ risk-adjusted valuation and return forecasts from 2023 to 2040 under multiple climate scenarios and Resilience Index™ risk, vulnerability and readiness scores for 40,000+ U.S. zip codes and Canada.

(II) REIT Sustainability Scores

Benchmark REIT properties and portfolios based on over/under exposure to market performance and resilient geography, and asset and fund-level rankings to support disposition and acquisition strategies

(III) Alpha REIT

Construction of thematic or hybrid REITs using Alpha Finder™ to filter and screen top-performing locations according to indicators such as climate resilience, renewable energy, municipal debt, infrastructure spending, demographics, labor market trends, and dozens of other variables, with further stress-testing through our Scenario Forecaster.

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