Useful Tools to Rejuvenate CRE Assets and Communities: New Urbanism, Smart Growth, and ESG Investment Principles

·6 min read

CHICAGO, Jun 15, 2021--(BUSINESS WIRE)--DBRS Morningstar published a commentary describing the relevance of New Urbanism and Smart Growth real estate development principles in redeveloping, repurposing, and reusing CRE properties in order to rebuild communities and cities in the aftermath of the coronavirus pandemic. The commentary also illustrated how these principles are consistent with environmental, social, and governance (ESG) factors that are attracting increased attention from CRE investors.

  • New Urbanist development principles have the potential to address environmental factors in several ways. These include an increase in the amount of open space, reduction in greenhouse gases resulting from a reduced need for automobile use, building designs that are more energy efficient, and use of low-emission building materials.

  • New Urbanism demonstrates the impact of good physical design on overall quality of life. It beautifies space; supports human interaction, community engagement; and facilitates important societal goals, such as improved diversity, healthy living, and support of local business and commerce.

  • New Urbanist and Smart Growth communities incorporate environmental and social principles outlined in generally accepted ESG investment criteria, as well as DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings. Communities and developments that have been built following New Urbanist principles particularly reflect positive characteristics that could insulate investments from environmental and social risks. These positive attributes will be increasingly important to ESG-focused CRE investors because they are predisposed to reflect these positive ESG principles. In the years to come, DBRS Morningstar expects New Urbanist and Smart Growth developments to represent a valuable investment and development strategy for investors and community stakeholders alike.

"New Urbanist and Smart Growth development principles concretely illustrate many of the environmental and social factors outlined in generally accepted ESG investment criteria," said Kevin Augustyn, Vice President at DBRS Morningstar. "Communities and developments that have been built or redeveloped following New Urbanist principles particularly reflect positive characteristics that could insulate these investments from environmental and social risks. These positive attributes will be increasingly important to ESG-focused CRE investors because they are predisposed to reflect these positive ESG principles. DBRS Morningstar expects New Urbanist and Smart Growth developments to represent a valuable investment and development strategy for ESG focused investors and community stakeholders alike."

To view the full report, click here: https://www.dbrsmorningstar.com/research/380097/useful-tools-to-rejuvenate-cre-assets-and-communities-new-urbanism-smart-growth-and-esg-investment-principles

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Stephen.bernard@dbrsmorningstar.com

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