FTSE, NAREIT, USGBC Develop Groundbreaking Green Indexes

WASHINGTON, DC-FTSE Group, NAREIT and the US Green Building Council are in the process of building a new family of green property indexes for both institutional and retail investors. Expected to debut in the first quarter of 2013, the indexes will be based on the FTSE NAREIT Index Series and use data—namely 13,126 LEED and 18,402 Energy Star projects—provided by USGBC.

There will be 76 REITs in the index at first. Any REIT with a LEED-certified or Energy Star-rated building is eligible, NAREIT’s SVP Brad Case explains to GlobeSt.com. The weight given to each REIT in the index is based on how much of its portfolio is green. Some, such as Government Income Properties Trust and Vornado, have a significant weight, he says. Others are just starting on greening their portfolios. “Some REITs in, for example, the industrial space won’t have many buildings in their portfolios that are green because the industrial asset class started later with this process than office,” Case says.