Join Us at the Green Building Finance and Investment Forum West

Have you heard about the upcoming Green Building Finance & Investment Forum?  We’re posting the fast facts here for those readers who have been asking via blog comments and direct emails to us about the details.

What: Green Building Finance & Investment Forum - West

When: 2-4 March 2009 (Monday through Wednesday)

Where: Hyatt Regency, San Francisco

Why We Recommend This Conference

Produced by Infocast, and sponsored by Galley Eco Capital, this conference is for commercial real estate professionals focused on the investment and finance side of sustainable and triple bottom line real estate — green real estate investors, developers and their capital sources.

The particular value of this meeting comes from the amount of attention paid to authenticity and high quality, pragmatic info: all the speakers are on the ground pacesetters who are actively advocating for green real estate and doing deals in the space. The audience is well-informed and outspoken in their comments and critiques.  We work very hard to structure a program that delivers lots of specific drill-down as well as quality networking.

For a primer on the type on content that you can expect from this forum, check out our detailed summaries of this past September’s Green Building Finance and Investment Forum East, held in New York.

Galley Eco Capital is sponsoring this forum for the third time.  We do it because we greatly enjoy the relationships and business that has come from the community of professionals that repeatedly visit this forum.  They are sharp, positive and keep us all on our toes.

In addition to keynotes by Sam Adams, Mayor of Portland and Dave Williams, CEO of ShoreBank Pacific,  our own Lisa Michelle Galley will chair the meeting and will also present during the workshop titled Designing, Developing and Financing Bright Green Communities.

Other forum topics include:

• Financing Energy Efficiency Retrofits
• Portfolio Owners & Pension Fund Perspectives
• Triple Bottom Line  & Green Real Estate Investment Funds
• Brewery Blocks: A Case Study in Maximizing Investment Value
• Green Leases

Please contact us if you would like to to meet with us during this event.

We look forward to seeing you there.

Part 1: Lessons for Future-Proofing Property Values

Since when has any firm achieved competitive advantage by just goin’ along with the crowd? Even in the current tough capital markets environment, excellence in real estate demands a continuous search for the newest ways to protect and advance asset values. This first installment of our Special Series on the Green Building Finance and Investment Forum New York,  features highlights from the talks by industry pacesetters that make sustainable real estate’s tomorrow happen today. It was a workshop chaired by Leanne Tobias, of Malachite LLC, and Galley Eco Capital’s Lisa Michelle Galley. Specifically, the session addressed threats and opportunities for investors created by rising energy costs, carbon policies, green building regulations, and changing tenant demand.

Fast Facts:

1. In today’s tenant markets, green buildings are the entry price for retaining corporate tenants - and their top talent.
2. On-site power generation and other new building technologies are not ‘star wars’ experiments, rather pragmatic, down-to-earth tools for energy price risk-mitigation.
3. Special taxation districts are a way to create financial solutions for community-scale sustainable development.

“I advise my clients to only consider

green facilities.”

– Peter Miscovich, Managing Director of Strategic Consulting, Jones Lang LaSalle

Green Buildings Are Plug-and-Play Solutions for Tenant CSR - and an Entry Requirement for Competitive Landlords in a Tenant’s Market

Peter Miscovich advises Fortune 100 companies on their corporate sustainability strategies. At GBFI, he laid out the 10-15 year roadmap on how tenant demand and demographics will dramatically impact real estate values. So what’s he saying?

• Corporate sustainability is now a permanent issue that will influence all organizational decisions, including real estate. Companies are paying attention to their energy use, and green buildings will be the required tool in their strategy toolbox to mitigate their exposure to energy and operating expense price risk. This will have major implications for the owners of existing, conventionally built commercial and industrial properties.
• Corporations will reduce their real estate footprint. Existing facilities are structurally underutilized, and the advent of telecommuting, office hostelling, and remote data management (from 3rd party vendors) will further reduce demand for office and flex/industrial space.
• By 2012, we will have a nationwide carbon policy, and those policies will directly impact real estate patterns.
• The suburban corporate campus model is outdated.
• Over the next 25 years, the vast majority of new household growth will be childless. There will be an increase in demand for smaller housing units, developed around transit.
• Given these impending changes, metropolitan areas that have scalable urban and suburban public transportation systems will prosper.

These expected changes point to demand and value implications for all commercial property types. Certified green buildings are a plug-and-play solution within overall corporate sustainability strategy. And in tough economic times, when it’s a tenant’s market, tenants — and their top talent — have more leverage to demand the green space they seek.

This has harsh implications for those landlords who want to retain corporate tenants, but will not or can not adapt space to the tenant’s corporate sustainability requirements. At the market level, this means that green commercial real estate sited near public transportation and affordable urban housing will be the favored locations of corporations over conventionally built property, because it provides them with significant soft and hard cash benefits.

Future-proofing Property-level Energy Price Risk: On-Site Power Generation and ESCO-led Retrofits

Incorporating on-site power generation into new construction and existing properties is no longer the province of special use properties like research labs and hospitals; today’s market considerations show this to be a pragmatic energy strategy that is gaining traction among the investors within the “four food groups”, too.

Fred Fucci, a partner at Arnold and Porter, LLP, addressed some of the challenges to creating and managing on-site generation capacity, as well as two other potential methods to minimize the impact of high energy costs:

• Utilize an energy services company (ESCO) to assess energy usage of existing structures, and enter into a performance contract to make recommended capital improvements.
• Use less energy, period. (Our comment: Everybody laughed when Fred said this, but heck - who can challenge that?).

Taking future-proofing one step further, Ed Brzezowski of Noveda Technologies, expanded the boundaries of technologically possibilities with his presentation of Noveda’s 31 Tannery project,  a 42,000 square foot office/flex structure with “net-zero electric” operations.

31 Tannery, in Branchburg, New Jersey, enjoys the rare Energy Star score of 100 and is a living showroom for high-performance, sustainable building technologies. Noveda, who’s business is to provide technology tools for monitoring real-time information about building energy use, were in need of new office space, wanted to show off their innovative capabilities and were resolute about walking their talk. The result? 31 Tannery uses less than 20% of the energy consumed in a conventionally-built structure, and reduces its carbon footprint by more than 1 million pounds of CO2 per year.

But wait, there’s more…. The most impressive number was the expected payback period for the advanced energy systems of 6 to 7 years, which is well within the investment horizon for institutional investors.

But participants had critical questions for Ed: do all those cutting-age systems actually cost out? Ed’s response? Yes, if you properly monitor your system performance. At 31 Tannery, they track real-time system performance down to 10 seconds, which allows them to catch and fix every system glitch that could negatively impact energy performance, and undermine their expected return on investment.

Special Taxation District Enables Community-Scale Sustainable Development

Frank Owens presented Georgetown Land Development Company’s vision of future-proofing: a to-be-built, transit-orientated, new-urbanist, mixed-use, brownfield development with on-site energy generation.

This $90 million re-development of the Gilbert & Bennett industrial site in Redding, Connecticut, will feature 300,000 square feet of commercial space, and 415 housing units, which includes loft-style apartments, townhouses and single-family homes. The 55 acre site will also feature a passenger rail link into New York City.

The development will create a special taxing district to provide low-cost financing for environmental site clean-up, rail-station improvements, and renewable energy systems. The district is a financing platform that can issue bonds, temporary notes, and other financial instruments, which are payable through the district’s fees, revenues, or benefit assessments. An important feature of this district is that, unlike tax incremental financing (TIF), the local municipality and state are not liable for the district’s debt. There is no specific limit to the number of financial instruments that the district can offer.

While the real estate market is in a downturn, and other projects are being canceled, this sustainable real estate project has lined up financing, and will proceed with medical office and local-serving retail in the project’s first phase.

By incorporating on-site energy generation, multiple transit linkages, and a compact urban format featuring multiple uses, this project is hedging against many of the forces that are affecting real estate values. Have you done the same yet with your portfolio?

*  *  *

Don’t forget to read the other installments of our Special Series on the Green Building Finance and Investment Forum New York. Our series brings you perspective and frank discussion from the industry pacesetters that are making sustainable real estate’s tomorrow happen today.

Photo Credit: 31 Tannery Project, Copyright 2008 Ferreira Construction

Photo Credit: Georgetown Land Company

Premium Real Estate’s “Shift to Green” Assessed and Advanced at Infocast’s Green Building Finance & Investment Forum—East

LOS ANGELES, CA Leading institutional investors, fund managers, developers and thought-leaders will convene in New York City September 8-10, 2008 to gauge the impact of the “green tsunami” on property values and portfolio energy efficiency at Infocast’s Green Building Finance & Investment Forum–East.

One report and study after another (from Costar, New Buildings Institute, Leonardo Academy, among others) validate claims that green buildings lease faster, and at higher rents, and drastically cut operating costs, up to 25-30%. The U.S. General Service Administration and a growing number of major cities, including Los Angeles, Dallas, Washington DC, and Boston have mandated LEED™ standards for new buildings, with San Francisco and San Jose not far behind. A new consensus is emerging that the perceived risk factor once attached to green building may be shifting to non-green, as it depreciates against the long-term higher values of LEED™-rated projects.

Building on the momentum of Infocast’s remarkably successful Green Building Finance & Investment Forum – West in San Francisco, Infocast has brought together the most forward-looking and incisive industry practice and thinking around green buildings in order to provide a venue for high-level networking among participants who have made substantial commitments to sustainable property development and investment.

Speakers will debate the strategic implications of the new market statistics, and explore the freshest, most ahead-of-the-curve insights on how to maximize green value creation for both new projects and existing building portfolios. They will also explore cutting-edge topics such as green leases, imminent carbon regulation, intelligent and net-zero buildings, quantifying social and environmental metrics, and the impact of high oil prices and “vehicle miles traveled” on property values.

The Forum commences with a keynote by Douglas Lawrence, Managing Director of JP Morgan Asset Management’s Urban Renaissance Fund. Winston Hickox, former environmental policies advisor for CalPERS and Director at Thomas Properties Group, will offer the luncheon address. The Forum is preceded by two half-day workshops: “Future -proofing Property Values” and “Preparing Your Portfolio for LEED™ EB and Energy Efficiency Retrofits.” The event, produced by Infocast, is also sponsored by Greenberg Traurig LLP, Galley Eco Capital LLC, and Malachite LLC.

The Forum will take place at the Coleman Center in midtown Manhattan. Full details and agenda can be found at www.infocastinc.com/building. Registration: (818) 888-4445 x43.

Come to the Green Building Finance & Investment Forum

I’m spreading the word about the Green Building Finance & Investment Forum, 20-22 February here in San Francisco. Its tailored especially for green real estate investors, developers and their capital sources. (Full disclosure:My firm, Galley Eco Capital, is a leading conference sponsor.) Registrations are coming in at a pretty good pace and we are expecting a great crowd.

There’s a great lineup of Industry Pacesetters — that’s Green Journey talk for the early adopters within institutional real estate — those who are already committed to building and operating green real estate. They’ll be talking about how they’re making good returns by building and retrofitting green.

I’ll be teaching a class, moderating a panel on triple bottom line investing as well as on another panel talking away about, guess what — green finance. There will be a diverse group on that panel, covering emerging topics such as renewable energy finance, green real estate securitization as well as the role of incentives in underwriting green deals.

Participants will also get to hear from well known social investors who are active in investment real estate. They’ll get a dialogue going with the real estate crowd about why we see so little action from socially responsible investors in investment real estate — and what we can all do to change that.

Last but not least, topics like risk management, legal and valuation issues will be talked about as well.

Hopefully this forum will extend and deepen the network of committed green investors and developers, with more capital to follow.

Follow the link to check out the details.