ABSTRACT
Sustainable real estate investment trust (REIT), analyses REIT environmental performance and the cost of equity by investigating the relationship between sustainability and the cost of equity capital for 211 listed US. Sustainability is measured using the two leading energy labelling programs, leadership in environmental and energy design and energy star, with the cost of equity assessed using four individual implied cost of equity models based on earnings per share forecasts, from which an average is taken with cost of equity estimates then regressed on the sustainability measures and relevant control variables. W. R. Gebhardt, C. Lee and B. Swaminathan use a model which calculates the cost of equity as a function of the return on equity. The J. Claus and J. Thomas model is a variation on the residual income or "abnormal earnings" model. The model proposed by J. A. Ohlson and B. E. Juettner-Nauroth is a generalization of the dividend growth model.
