Corporate Social Responsibility In Commercial Real Estate


Real estate, both commercial and residential, is about building up communities. Physical properties are the literal foundation of every real estate project.

In recent years, a number of environmental and social factors have become driving forces for change in the ways buildings are constructed and used. Potential tenants and investors are looking to transform the use of buildings, maximizing efficiency, and making them more integral to community life. For example, mixed use projects mean buildings can fulfill multiple roles over their lifespan, such as those that hold both residential and office units.

The growing emphasis on health and wellness is also pushing the need for more sustainable buildings. Increasingly, investors and tenants are looking for a focus on socially responsible building projects. This is where corporate social responsibility comes in.

What Is Corporate Social Responsibility (CSR)?


Corporate social responsibility (CSR) is the concept that businesses have a responsibility to do good. The company or business must hold itself socially accountable to itself, its stakeholders, and the public. In other words, its actions should work to mutually benefit itself and the community around it. By practicing corporate social responsibility, also known as corporate citizenship, companies can be conscious of the kind of impact they have on all aspects of society, including economic, social, and environmental.

CSR is a broad concept that can take many different forms depending on the company and industry. For example, some companies may choose philanthropy or volunteer efforts as their CSR programs. In the commercial real estate industry, this can look like building greener buildings, or investors choosing to improve a property by upgrading its utilities to be energy efficient. It can help boost the visibility of an investment firm’s brand and benefit society simultaneously.

Why Is CSR Important?


Increasingly frequent natural disasters mean many people, including those who invest in commercial real estate, have seen an asset or two affected by the extreme weather. This has led some investors to consider how their investments may be affected by increasingly sporadic weather or how a new development may lead to environmental problems in the future. In addition, some investors are finding they are making higher returns by focusing on sustainability. More sustainable buildings tend to attract higher-quality tenants and allow for higher rents.

New regulations are popping up, such as those in New York, which required building owners to reduce their carbon footprint. It is regulations such as these that add to the risk of not investing in sustainability. CSR can benefit the relationship employees have with their corporations, boost morale, and help them feel more connected with the world around them. This can further improve tenant relationships as well.

Types Of CSR

There is no official list designating what companies or investors should do as part of embracing CSR. Instead, companies often adopt policies that align with their goals and their visions, while still promoting sustainability. These policies, however, tend to fall under four broad categories.


Environmental Responsibility


For companies and investors committed to CSR, it’s important to engage in environmentally friendly practices. The general public tends to look at corporations and large real estate developers as significant contributors to environmental problems, such as pollution, waste, and natural resource depletion.

Investors looking to be more environmentally responsible can show their commitment by choosing properties that are more energy efficient or use sustainable materials in their design. In real estate, this might look like ensuring tenants have access to sustainable materials or energy efficient appliances.

Ethical Responsibility


Being ethical means the firm, REIT, or investors engage in fair business practices across the board. While this will look different across industries and different companies, for the real estate sector, this may look like being upfront about a property’s condition to both future buyers and tenants. It could also mean disclosing any information, such as a new development, that might affect the current property’s value. 

Philanthropic Responsibility

It has become a trend for companies to give back to the communities they reside in and donate to causes that align with their mission. This could look like sponsoring a local nonprofit’s annual fundraiser, donating to local food banks or holding community blood drives.


Economic Responsibility


Businesses, companies, and investors acting with economic responsibility in mind tend to make financial decisions that prioritize doing good, not just increasing profits. This type of responsibility is intertwined with the three types listed above.

This means investors who prioritize economic responsibility choose to invest in a more sustainable building or choose to retrofit an older building to meet environmentally friendly standards, even if it initially costs more.

What Is The Impact of CSR?


The movement toward CSR has had an impact in several ways. For example, many companies have taken steps to improve the environmental sustainability of their operations. There has also been a positive trend, where more people are likely to do business with a company, such as tenants with a landlord, if they perceive them to be socially responsible.

As climate change continues to affect the nation and the world, more tenants are likely to turn to developers, manufacturers, and companies backed by investors who are environmentally minded and socially responsible. In fact, some investors now see investing in sustainability as less risky than investing in older, but less sustainable buildings.

FAQ’s


What is corporate social responsibility?

Corporate social responsibility, or CSR, is a relatively new concept that calls for investors, firms, and developers to integrate social and environmental concerns into their strategies, operations, and customer relations. An example might be focusing on investments in greener buildings or projects, such as modern apartments with solar panels or water-saving appliances. The goal is to focus on doing good, rather than just increasing your profits.


What are the four types of corporate social responsibility?

The four pieces of CSR are environmental responsibility, philanthropic responsibility, ethical responsibility, and economic responsibility. Each one supports a different aspect of overall community wellness, including the business community, customers, and industry community at large.


Why is corporate social responsibility important?

Aside from benefiting the communities surrounding a business, CSR also plays a crucial role in a brand’s perception. Customers are more likely to engage with a company, brand, or commercial development if they believe those behind the project care about the wellbeing of the neighborhood around its business. CSR has also shown the potential for improving employee wellness within a business, which in turn improves a business’ profits and work ethic.


What are the benefits of corporate social responsibility?

CSR comes with a variety of potential benefits. These include better brand recognition, positive company reputation, increased sales or interaction and customer loyalty, better financial performance, and even savings on operating expenses.

Why Invest With Avistone?


Avistone is a rapidly growing commercial real estate investment firm focusing on the acquisition and operation of multi-tenant flex/industrial properties and the acquisition and asset management of hotel properties nationwide. Investors have the opportunity to purchase equity shares with the potential to receive monthly cash distributions and capital appreciation upon sale.

In order to provide the best possible outcomes for our investors, we acquire properties located in strong, dynamic markets with historically high occupancy rates. We also focus on asset and property management that provides superior service to tenants and guests.

Since our founding in 2013, we have acquired 26 properties, totaling over 4 million square feet of space. Contact us today to learn more about our current offerings.

© 2024 Avistone, LLC. All rights reserved.

*IMPORTANT DISCLOSURES:

Communications from Avistone, LLC or its affiliates (referred to together as "Avistone"), whether it is transmitted through its website, social media, email, text or any other marketing platform used by Avistone (collectively termed "Avistone Communications") must not be taken as recommendations or endorsements to purchase, sell, or hold any securities. Furthermore, Avistone Communications should not be considered as advice related to investment, taxation, finance, accounting, legal matters, regulations, or compliance.

To gain a comprehensive understanding of the risks associated with the securities mentioned herein or in Avistone Communications, it is essential to review them with related private placement memorandums and other offering documents. Participating in private placements requires substantial financial commitment and the ability to tolerate a complete loss of the investment. Avistone Communications provide a preliminary overview and insights into Avistone sponsored investments, and are intended for initial reference. However, they do not encompass all relevant information and should not be considered a complete representation. The information presented is subject to further updates without notice and qualification as provided in the relevant offering materials. It's important to note that Avistone is not registered as a broker-dealer, and Avistone does not make any claims or warranties regarding the legality of investments in Avistone sponsored investments ("Avistone Investments").

Investing in alternative securities or real property carries inherent risks, are illiquid, may depreciate in value, and is limited to accredited investors under the Securities Act of 1933. These risks include market fluctuations, credit vulnerabilities, interest rate exposure, and potential loss of capital. Before investing, all prospective investors must conduct an independent assessment, evaluate fees, uncertainties, and risks outlined in offering materials, and consult with investment, tax, financial, and legal advisors. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or endorsed any Avistone Investment, or authenticated the accuracy or exhaustiveness of any information or materials furnished via Avistone Communications.

The information in Avistone Communications is not a recommendation, investment advice, or a solicitation to buy, sell, or hold any security or investment strategy. It is not provided in a fiduciary capacity and does not consider an individual investor's specific goals or circumstances. The information reflects Avistone's market interpretation, and the success of Avistone Investments is not guaranteed. Investment decisions should be based on individual goals, in consultation with financial professionals. Past performance does not predict future outcomes. All research and supplementary information in Avistone Communications are for informational purposes only, and Avistone assumes no responsibility for inaccuracies or omissions in the content or linked resources.

The financial and investment benchmarks, including forecasted internal rate of returns (IRR), total return, distribution yields, multiples, and investment holding period returns, displayed on Avistone Communications are projections, subject to change and should not be considered as actual investment outcomes or guarantees of future results. These benchmarks always come with inherent risks, such as market volatility, operational uncertainties, and limited liquidity. Additionally, financial metrics and calculations within Avistone Communications have not undergone independent verification or audit and may differ from actual financial metrics for any investment. The investment data provided is sourced from entities believed to be reliable, but no assertions or warranties are made regarding its accuracy or comprehensiveness, and Avistone assumes no responsibility for any inaccuracies.

Avistone’s historical track record in the industrial sector showing past performance is no guarantee of future results. The performance of Avistone’s prior industrial projects have not been audited by any third party. Not all investors received the same returns due primarily to investments in different property offerings. Full-Cycle Track Record average metrics are based on weighted averages that treat investment dollars equally and are calculated after summing the results of all Avistone full-cycle industrial investments, weighted by each investment's respective capitalization amount for each Full Cycle Investment.

Materials or data emanating from third-party media external to this domain or Avistone Communications may address or refer to Avistone or correspond to information contained herein, however, Avistone does not extend endorsement or accountability for such content. Hyperlinks to external sites or reproduction of content from third-party sources do not denote an endorsement or approval by Avistone of the content thus linked or reproduced.