Investors Use Green to Make More Green
Everyone knows it takes green to go green.
Now it seems some investors are discovering that taking an environmentally aware approach to property investing could make them some green in the not-too long run.
Take Jamestown Properties, a German real estate investment company, which has said it will invest $3 – $10 million to retrofit its $4 billion portfolio of American real estate.
It’s a nice example of a promising trend – private sector investors looking at sustainable building as a sound financial prospect.
Jamestown Properties isn’t pursuing these green initiatives out of the goodness of their hearts. They’re doing it because green buildings typically have lower operating costs and can charge about 2% higher rent than similar buildings.
But more importantly, Jamestown’s managing director Matt M. Bronfman, said the company predicts green-building attributes will become essential for investors looking to lease or sell their properties down the road.
In the short run, it doesn’t hurt that an energy audit and follow-up conservation measures cut annual energy use and carbon emissions by 15% at one of the company’s properties.
Organizations like the Responsible Property Investment Center (RPIC), which brings together real estate investors, managers and developers, suggest there are plenty of bottom-line reasons for investors to get involved with activities which address the environmental and social affects of property investments.
• Saving money by reducing use of resources like energy and water;
• Reducing risk due to new regulation, shareholder complaints and enforcement;
• Brand building and market segmentation;
• And more. For more information, see the RPIC website at http://www.responsibleproperty.net/assets/files/rpic_value_proposition.pdf.
While putting aerators on faucets, adjusting lighting and revamping HVAC systems can yield considerable benefits, increasing financial support for sustainable property development could be one of the best things to happen to the green building industry since compact fluorescents.
That’s because industry insiders frequently maintain that the biggest impediment to green building is lack of capital. Until now, with green buildings presenting greater upfront costs, private sector investors were reluctant to pony up the extra expense because they didn’t plan owning the property long enough to realize the benefits.
As a result, green building was primarily the province of governments, institutions and those wanting to make a statement.
With groups like RPIC, the Green Building Finance Consortium (www.greenbuildingfc.com), and Jamestown Properties showing the way, green building could soon attract those who simply want to make an investment.
See the whole article at http://www.nytimes.com/2010/03/03/realestate/03jamestown.html?pagewanted=2.