Simon Adams Discusses ESG Impact on Real Estate Investment Strategies

Simon Adams was quoted in the Law360 article “Market Forces Drive ESG, Not Proxy Bids, Say RE Experts” (subscription required). The article gathers opinions on the recent proxy bid involving BlackRock ESG Capital Allocation Term Trust – whose top holdings include a REIT – and Saba Capital Management and how this bid and similar bids, as well as board changes and market conditions, could impact real estate ESG investment decisions.

Commenting for the article, Simon said, “If we assume that Saba Capital is able to obtain board seats of any number and press for less focus on environmental, social and governance screening of new BlackRock investments, then BlackRock's real estate investments could potentially broaden into areas where they may have avoided participation or scaled back over a period of time.”

He added, “While a new board makeup at the BlackRock ESG fund could cause a shift in real estate investment strategy, market forces such as the desire to have LEED-certified buildings are likely to have more of an impact.”

“I would balance [board makeup] against certain real estate trends which have shown to prevail over an extended period," said Simon. “ESG policies seem to me to be taking a similar path and have become a trend that I anticipate will prevail over the long run and not be unseated by a board member of any influence, because of broad support within an organization for ESG issues to be considered in order to meet the needs of all organizational stakeholders."