Check out our green finance interview on Sustainable Land Development Today

Lisa Michelle Galley talks about the current state of the green real estate capital markets within the article “Oases of Capital”, published by Sustainable Land Development Today.

An excerpt here:

“Galley favors the concept of responsible property investment — the triple-bottom-line approach — which is socially and environmentally progressive while generating market rates of return for investors. But the concept is new space for most people. It is a space literally forming before their eyes.”

Key points for the sustainable real estate community:

• In tough economic times, sustainable real estate sets itself apart in the eyes of institutional investors and communities because it delivers socially, environmentally and economically.

• An integrated finance strategy streamlines execution, reduces risk and boosts returns on sustainable real estate by combining real estate and  tax structuring know how with funding sources from incentives to tax strategies.

Finally, we recommend that you take a look at Sustainable Land Development Today, a very progressive publication for like-minded sustainability professionals. Tell them that we sent you!

ULI on the Financial Bailout as the Swedes Shake Their Heads Knowingly

Tired? I know, I know…

Staying on top of political theater and the daily collapse of banks can wear a body down.  Watching the never-ending series of CNN breaking news, checking your own bank’s solvency and reading the papers leaves nearly no time for work!

Well, we won’t tell you how to vote, but here’s a couple of items that might help you as you navigate the highly spun news on the financial bailout — or at least up your game at the next few cocktail parties.

And the green finance angle, you might ask? Well, because of our commitment to sustainability and responsible property investing, we monitor issues affecting the sustainability of communities, particularly their financial viability.  And with that, there are two items to help you in your thinking:

Item #1: Some nitty gritty on the bailout legislation impacting the housing market

We’ve been fans of  ULI’s blog, The Ground Floor, from the very beginning — way before they got their new cool lookin’ blog template.  John McIlwain’s post on the details of how the housing market could be assisted by the proposed bailout legislation spell out specific assistance actions that we do not normally hear about through the news media. He’s pulled out two core areas of focus, which depending on how they are implemented will determine whether we think the bailout was a good or bad idea. Those two areas are:

• program guidelines: this tells the entities getting assistance exactly when and how they should be creating programs and within what scope regarding their troubled assets. Specifically, these guidelines should contain:

(1) Mechanisms for purchasing troubled assets.
(2) Methods for pricing and valuing troubled assets.
(3) Procedures for selecting asset managers.
(4) Criteria for identifying troubled assets for purchase.

• foreclosure mitigation efforts: entities dealing in mortgages and related securities are empowered to offer assistance programs for homeowners that can help to avoid additional foreclosures.  Well, its about time! But, of course, we’ll have to see how both these issues evolve through the legislative process. It ain’t over till its over.

Item #2: Swedes Say ‘Been There, Done That’

Now for something related, but different. Take a look at this New York Times article about how the Swedes approached a similar financial crisis a few years ago. The focus: when faced with the same problems, they took a very different course of action. And the results were both positive and, more importantly, sustainable.

Green Real Estate Investing 101 - Cashing in on water savings

One of our new favorite blogs, Multi-family Guide, just alerted us to a recent article in Greener Buildings about the top ways commercial building owners can save money through better water management. We think you should take a read and send it along to your property staff for a quick check up on water management at your properties.

It’s a pleasure to share around because it is great advice from industry pacesetter Melaver – a true pioneer in responsible property investing whom we admire just as much as the folks at Multi-family Guide. Also pay attention to the fact that many of the best practices that they discuss cost very little, and therefore, generate a sizable payback on the investment.  Who doesn’t love a little extra NOI?

We always advise clients starting with sustainability programs to focus on the low-hanging fruit. The tips in this article are just that.

Happy saving!

Welcome to our new website!

Looks like you’ve just found our new home — we outgrew the old one.  Welcome and please take a moment to have a look around. After all, we built it with you in mind.

This new site gives us a more robust platform for engaging the green real estate industry and providing the cutting edge know how and resources we know you need to stay successful.  We’ve added a few publications, a glossary and educational resources.

You can get to know the Galley Eco Capital team and contact us with any questions you may have.

And of course, if you’re interested in reading up on green real estate finance and investment, you can take a look at the latest from Our Green Journey.  If you subscribe to our feed, you’ll be able to stay on top of all of our happenings, publications and events.

Enjoy!

What’s different about underwriting sustainable real estate?

Do you see the unique value that green brings to your real estate investments reflected within their appraisals? No? Well, join the big crowd and read on: this is a special post for you.

Not everybody in commercial real estate is immersed in gloom and doom. Some folks, like the Appraisal Institute, are using the downtime coming from fewer transactions to get themselves fit for the sustainable real estate future. In case you missed the announcements, the AI is in the midst of a series of classes for their members, to introduce them to sustainability principles and the basic considerations for appraising green buildings.

I’ve had the chance to talk with the seminar’s co-developer,  Theddi Wright Chappell, Cushman Wakefield’s new National Practice Leader for Green Buildings & Sustainable Real Estate. The overall course is framed around the question “how is a sustainable building different?” than conventionally built property.

With good questions focused around understanding the differences, appraisers will be more likely to surface up more relevant facts that help them to better distinguish the risk profile of the green vs the non-green building.

As for the potential differences, any of these may be present within the green transaction:

• lower exposure to energy and consumables costs increases
• potential for greater construction and delivery risks, depending on factors such as availability of trained professionals
• different pattern of lease-up and absorption risks
• different pattern of tenant retention and turn-over risks
• different pattern of periodic capital improvements
• lower exposure to obsolescence.
  

The Green Journey Take

This is just a tidbit of the considerable body of knowledge that Theddi and her AI colleagues have packed into this very timely course for those just getting into the green real estate game.

Within our own practice, we typically receive detailed investment cases from clients for green buildings, which completely overlook any type of enhancement that sustainability brings to the assets. Nearly 100% of the time, some portion of our investment client work involves working with the the investor to “connect the dots” between the green building’s design and construction budget and the operating pro forma assumptions during the holding period. The clients rightfully want to know how appraisers might handle these same issues, under the logical (but incorrect) assumption of if the appraiser won’t count it, why should we do change our underwriting? So, from our point of view, it is good to see that the AI is helping to address this question with their new course.

What can you do? Talk with your appraisal colleagues about how they might evaluate sustainable real estate and urge them to take this new course, if they have lots of questions.