Nuveen Real Estate is launching a global impact investing sector aimed at expanding affordable, sustainable and climate safe housing while also addressing pressing social and environmental challenges in the U.S., Europe and Asia-Pacific region. The framework will support growth goals of up to $15 billion in real estate assets under management by 2026.
Nadir Settles will serve as global head of impact investing and Pamela West as senior portfolio manager, impact investing. Settles, an industry veteran who joined Nuveen Real Estate in 2012, will also continue to lead investments as head of the New York office. He will report directly to Carly Tripp, global chief investment officer & head of investments at Nuveen Real Estate, and lead an international team across the U.S., Europe and APAC in identifying and pursuing relevant real estate impact investments. West reports to Shawn Lese, chief investment officer & head of funds management, Americas, at Nuveen Real Estate. West will continue to oversee the framework’s strategy, portfolio construction and client relationships. She has 25 years of industry experience, including a decade in deploying capital into affordable housing strategies and addressing social and environmental issues.
Settles and West told Multi-Housing News they anticipate “investing in disinvested communities, where we can create density and an economic engine through real estate place making.” They said that could include medical office buildings, retail, both national and locally-owned chains and stores, as well as businesses operated by residents of the community such as barber shops, coffee shops and restaurants. Settles and West said services will also be provided including partnerships to set up job training and financial empowerment sessions covering credit, banking and retirement issues. Healthcare and wellness partnerships offering visiting nurses and after-school programming for children are also anticipated.
They said the Nuveen Real Estate impact investing platform would be different than others for various reasons. The mandate is designed to improve communities by providing supportive services, enhancing residents’ quality of life and financial outcomes while at the same time supporting Nuveen Real Estate’s commitment to making its global property portfolio net zero carbon by 2040.
“We are intentional about the double bottom line. It’s not just about the economic return, but also about the impact business plan that is actionable and once implemented will create real social mobility for the residents of the communities we invest in,” Settles and West told MHN.
Building on Nuveen’s Record
Nuveen Real Estate, a subsidiary of TIAA, is one of the world’s largest real estate investment managers and has more than $152 billion in assets under management. Chris McGibbon, global head of real estate at Nuveen, said in a prepared statement the new framework will build on Nuveen’s 50-year track record and reputation as a pioneer in impact investing. McGibbon said he is confident that under Settles’ and West’s leadership the new sector will address some of the most pressing challenge in local real estate across the globe, while allowing investors to have a significant impact through their capital investments.
Last month, the firm expanded its range of impact investing strategies to Europe with the launch of the German living impact platform, led by portfolio manager Tanja Volksheimer, to deliver social and environmental impact through affordable housing. Nuveen also recently had the final close of its first global private equity impact platform, which targets investments that promote energy efficiency and an expansion of services for underserved communities.
Nuveen made its first impact investments in the 1980s and now manages more than $5.8 billion across all of its public and private markets impact investing strategies.
West said in prepared remarks that the portfolio has been dedicated to creating change by placing environmental and social impact at the heart of its investment strategy. She said it ultimately drives better outcomes for residents and inclusive communities while delivering a healthy financial return.
Settles and West said they feel confident they can meet the targeted goal of $15 billion in impact investments by 2026. The Commercial Observer reported $3 billion has already been directly invested in 105 real estate assets around the world. In the U.S., several investments have already been made in the New York metro area, with Hudson Valley Property Group as a partner in affordable housing properties including the 135-unit Los Tres Unidos Apartments in East Harlem, N.Y., the 383-unit Riverview Housing in the Bronx, N.Y., and the Van Wagenen Avenue Apartments in Jersey City, N.J.
“We work with some local and regional operators across the country, but our platform will also acquire and manage assets directly,” Settles and West told MHN.
They said they have a significant pipeline of assets they are working on in the Sun Belt, on the West Coast, and in the Mid-Atlantic and Northeast regions.
Plans include investing in early-stage projects, upgrading or replacing HVAC and other mechanical systems to make buildings more energy efficient, adding services, creating local residents’ associations and extending affordability restrictions.
Settles and West said when the time comes to sell properties, they want “to sell to likeminded investors that aim to preserve affordable housing for the long-term.”
Plans for investments outside the U.S. are also underway, particularly in Germany, and will grow over time, they said.
“These investments require significant local knowledge and alignment with our strategy to successfully execute and create the kind of impact we want across the portfolio. Therefore, our partnerships will sometimes include public relationships as well as boots on the ground,” Settles and West told MHN. “We are currently exploring some of these areas and want to be intentional about where we can have the greatest impact.”