Reit Magazine - March/April 2021 - 43

Ivy LaSalle Global
Real Estate Fund
(IRESX)

$93 million
(as of 3/17/21)

KOLITCH: We actively manage our real estate portfolios and will modify them if we believe it is prudent
to do so. In the last four to five months of 2020, we
reoriented some of our holdings and investment
themes with an eye towards 2021 and 2022 and an
expectation that economic conditions would improve
as COVID-19 vaccinations are widely administered.

Baron Real Estate
Fund (BREIX)

$1.3 billion
(as of 3/17/21)

HOW IS INVESTOR INTEREST IN ESG
(ENVIRONMENTAL, SOCIAL, AND
GOVERNANCE) ISSUES AFFECTING
YOUR INVESTMENT STRATEGY?
JONES: We have recently integrated ESG factors into
our investment approach for the REIT market, so we
pay close attention to the ESG factors that are most
important to real estate. On the environmental side,
those include green buildings and reducing greenhouse gas emissions. On the governance side, we pay
close attention to the alignment of management compensation and to total shareholder returns. We pay
close attention to board structure in terms of having
a majority of independent board members, and we're
increasingly focused on diversity throughout a REIT's
employees, management team, and board of directors.
We score each of the REITs in our investable
universe as it relates to ESG, and those scores
influence our investment decisions and how we
construct our portfolios.
KAUFMAN: ESG is an important area of focus across
LaSalle's platform, and appropriately so. Real estate
has a major impact not just on the world's carbon
footprint but on the safety, comfort, and well-being
of society at large, which presents the whole real
estate industry with a lot of responsibility, but also a
lot of opportunity to effect meaningful change.
ESG is factored into our company underwriting and
is an important component of our assessment of a company's fair value. We don't redline companies that have
weaker ESG scores, but we ascribe less value to them
and more value to companies that have a thoughtful
approach to environmental sustainability, take care of
their employees and communities, and have sound governance. We think we can have an impact on company
behavior through investment and through engagement,
and we take that advocacy role seriously.
YABLON: We've always integrated ESG into our valuation process, and we continue to do so. Our focus
is to try to capture it in our discount rate and in our
valuation, to try to price it in as best we can.

BOKOTA: Our investment strategy has always been
focused on investing in quality companies at reasonable prices. So, for us, ESG is an integral part of
our process. We view quality as multidimensional,
not just about asset quality or the locations of the
assets, but it's also inclusive of ESG considerations.
Incorporating ESG factors into our investment process results in a more holistic approach to investment
decision-making.

WHICH COMMERCIAL REAL ESTATE
SECTORS DO YOU THINK WILL
PERFORM THE BEST IN 2021?
KOLITCH: We believe many of the laggards of 2020 will
generate solid returns in the year ahead. This group
may include certain apartment, office, retail, hotel, and
gaming REITs. Data center REITs are benefiting from
secular growth in the outsourcing of information
technology, increased cloud computing adoption, and
the growth in U.S. mobile data and internet traffic.
Wireless tower REITs are positioned to grow for
several years as the demand for data intensive devices
accelerates and new wireless technologies emerge.
Industrial REITs should continue to benefit from
robust warehouse demand, in part due to broader
e-commerce needs.
BOKOTA: Our favorite sector for 2021 is residential-
both single-family rentals and manufactured homes.
We're seeing increasing levels of demand, record-high
occupancy levels, and strong pricing power as people
look to get more space. They're also still trading at
Nareit: Real estate working for you |

43



Reit Magazine - March/April 2021

Table of Contents for the Digital Edition of Reit Magazine - March/April 2021

Contents
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Reit Magazine - March/April 2021 - Contents
Reit Magazine - March/April 2021 - 1
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