Multifamily REITs Essex Property Trust and UDR announced the first closing of a new Environmental, Social and Governance (ESG) focused investment fund, RET Ventures ESG Fund L.P. that seeks to support the growth and successful implementation of ESG solutions for the housing industry, including technologies that improve both the environmental and social outcomes of new developments and existing properties. The fund, which will target $80 million of investor capital commitments, will be managed by RET Ventures, a venture capital firm focused on technologies for the multifamily, single-family and broader real estate asset classes.
An important goal of the fund will be broadening the sector’s approach to ESG, utilizing a more holistic focus that addresses climate change and environmental risks as well as social issues, including housing affordability, building health and safety, and resident well-being. From an environmental standpoint, solutions may include platforms focused on improved building design, reducing energy usage and carbon emissions, efficient waste management 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 decades long commitment to sustainability and investing in technologies that target an environmental benefit,” said Mike Schall, CEO at Essex. “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”.
“At UDR, we pride ourselves on our commitment to sustainability, and our decision to help RET Ventures launch this fund should enhance the financial, environmental, and social dividends we deliver to our stakeholders,” said Tom Toomey, chairman and CEO of UDR. “UDR has achieved a variety of ESG milestones recently, resulting in the company being recognized by GRESB as the Global Sector Leader as the #1 ESG performer across all listed Residential companies. However, we know more progress is needed, both at UDR and as an industry. With our investment in the 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.”
While this fund marks the first RET vehicle solely targeting ESG-centric technologies, the VC firm has demonstrated a commitment to supporting sustainable innovation, including leading an ESG working group made up of more than 20 leading multifamily and single-family rental executives. The group has focused on identifying and evaluating pressing sustainability needs within the existing proptech ecosystem, evaluating impactful approaches to energy efficiency and identifying areas where new technology can make a significant impact.
“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 Christopher Yip, partner at RET Ventures. “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.”
