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.


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.

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