Dive Brief:

• Real estate investment trust WashREIT has received BREEAM In-Use certification for eight of its multifamily properties in the Washington, D.C., region. According to the REIT, it is the first set of multifamily assets to receive the global sustainability certification in the United States.
• WashREIT — which owns and operates real estate assets in the Southeastern U.S. in addition to the Washington, D.C., region — is currently pursuing BREEAM for additional properties in its portfolio, leveraging the certification to standardize sustainable operations for its existing properties and future acquisitions. 
• “Implementing the sustainability strategies that achieve certifications such as BREEAM have a broad range of returns on investment, including lower energy and water costs and reduced maintenance costs,” Eric Tilden, the senior director of environmental, social, and governance at WashREIT, told Multifamily Dive.

Dive Insight:

WashREIT acquired the Class-B multifamily properties spanning locations across Virginia and Maryland in 2019, including Cascade Landmark (pictured above). Most of them are more than 30 years old, and the suite of low-, mid- and high-rise buildings total 2,390 units. 

BREEAM, a suite of sustainability assessment methods and certifications for the built environment, individually assessed the eight WashREIT properties for sustainable materials and ESG practices, accounting for data about energy usage and cost efficiency. Third-party assessor UL, a global safety science firm, led the certification process. 

In 2021, WashREIT started the audit and upgrades to align with BREEAM’s In-Use certification standard as part of its $350 million Green Bond Framework to fund eligible green projects. Half of the eight BREEAM-certified properties earned a rating of “very good,” which is attributed to the improvements. 

“Historically, this asset class [Class-B] has lacked sustainability investments. But residents and investors alike care about sustainability,” said Paul McDermott, president and CEO of WashREIT, in an email. “As we work with BREEAM, our goal is to create opportunities for the industry and other operators to also find ways to invest in sustainable improvements and achieve ESG certifications for their assets.”

The REIT’s momentum toward sustainable capital allocations and ESG funding is amid increased demand for green financing options. In particular, issuances of green bonds — fixed-income securities issued to raise money to invest in predetermined climate and environmental projects — are expected to surpass $1 trillion by year-end.

Owner of approximately 8,000 apartments and approximately 300,000 square feet of commercial space in the Washington, D.C., metro region, WashREIT elected to pursue BREEAM over other ESG certifications for its multifamily properties due to its recognition among global investors and its suitability for the multifamily sector, according to Tilden.

Multifamily property owners typically only have partial energy and water consumption data given that residents contract utilities, which often removes existing buildings from eligibility for LEED certification. BREEAM, owned by independent global research and science organization BRE Group, differs from LEED certifications by considering a variety of property utility structures, Tilden said.  

Other WashREIT properties are currently undergoing review for consideration of BREEAM and other certifications. The REIT plans to continue investments to strengthen sustainability efforts across its portfolio, working with global partners that support ESG and net-zero carbon advancements. 

“We review all buildings regularly for potential green building certifications,” Tilden said. “We use these frameworks to develop cost-effective strategies that correlate with the programs, while also balancing the cost of certification with return on investment, including marketability.”

The firm is also eyeing potential health and wellness frameworks, including WELL and Fitwel and is still reviewing opportunities for LEED certifications, such as the LEED-Silver certification the firm achieved at its Trove Apartments in Alexandria, Virginia in 2021.

“We have seen a significant demand for owners and operators to improve their ESG performance,” said Breana Wheeler, the U.S. director of operations at BRE Group, in a press release. “The implementation of a holistic, science-based approach to building performance will prove crucial for the success of any asset.”