This paper investigates the relationship between ESG ratings and the operational, financial and market performance of Public Real Estate Companies (PRECs). By investigating a large sample of listed real estate firms from 2015 to 2021 in 35 countries, we find a positive relationship between overhead ESG metrics (and its sub-components) and firms’ market performance. Furthermore, we observe a negative relationship between ESG-Scores and the net operating income, general and administrative costs and financial costs. Our results remain robust after correcting for selection bias. Our results suggest that firms engaged in more socially responsible practices suffer from more financial costs and thus, have lower operational and financial performance. On the other hand, the stock market appreciates any decent investment in ESG, by overvaluing the corresponding companies.