Finally. A Green Building Finance Course for Non-Finance Professionals

Now you can pre-order the first ever green real estate finance course for non-finance professionals

A couple of days ago we kicked off the pre-order event for the new self-study version of the Competitive Edge Workshop 1: Communicating the Value of Green Building Using Principles of Real Estate Finance.

The first ever self-study course in green real estate finance for non-finance professionals

This all-in-one compact, dynamic course helps you communicate the value of your green building services to real estate finance and investment professionals.  It teaches you how you can present the value of your green building products and services to commercial property owners.

Plenty of in-depth, material to support your learning

• Screencasts of all presentations on DVD
• Course Pack - Study guide accompanying the presentations that provides backup information on presentation topics.
• Green Finance Research & Reference Guide - catalogs the key studies and references in the field.
• Green Finance Glossary - this is the only glossary with the most essential sustainability, real estate finance, investment and energy terms all in one guide. It simply doesn’t exist anywhere else.
• Sample Property Financial Analysis - based on an actual investment as an example of the kinds of financial analysis performed by commercial property investors.

50% price for only a couple more days

Everyone on our newsletter list gets 50% off the course when they pre-order now.  So you pay $149.95 now (vs the $299.85 regular price).  This special pricing will only last a couple more days. (If you are not on our list and buy the course now, you’ll get the 50% discount and will be automatically signed-up on our list.)

Get Free Bonus Gift

You’ll get  Financing Market Transformation, a unique collection of eight articles on the latest thinking and best practices in green real estate finance - donated by the most-respected leaders in the field, so we’re giving it away.

Learn at your own pace

This course gives you the competitive edge — everything you need and nothing you don’t

Buy the course now at:

http://www.galleyecocapital.com/green-building-resources/competitive-edge-green-finance-workshop/

Why colleagues are attending our Competitive Edge 3 workshop

I regularly talk with colleagues about how and why they are using green finance, to make sure our course content is at least meeting, if not exceeding, their needs.

Here are the perspectives of Jon Gibson and Rowan Edwards, who’ve already signed up for the upcoming Competitive Edge 3 workshop, Communicating the Value of Green Building Using Principles of Real Estate Finance.

The workshop is happening on June 24, 2010, here in San Francisco (download the course flyer here↓).

Why Jon and Rowan will attend this class

Jon Gibson, Hedge Fund Accountant, San Francisco

My background is in accounting for hedge fund portfolios, but I am transitioning into a green real estate finance position. I found the green finance series extremely valuable in helping me find my way; I have learned about the green real estate value proposition (the basic financial underpinnings), met many industry contacts-from architects and engineers to financiers, lawyers, and investors-who now serve as a network of resources, and developed a sense of the market. The guest speakers, drawn from a host of high-level public and private organizations, were exceptional.

The extensive (and high quality) handouts have allowed me to continue to learn and enrich myself long after the course was over. Lisa, George and the rest of the team (including USGBC-NCC) do a great job organizing, presenting and making sure each participant has several great takeaways.

Rowan Edwards, Sustainable Developer, San Francisco

My interest in Galley Eco Capital seminars is to find new ideas. As a sustainable business developer I am looking for new opportunities that may exist, not only in light of the current economic situation, but because innovative methods always seem to flourish and gain traction in times like these.

We have seen that other methods of financing exist like micro-financing (Grameen), and on the horizon, B-to-B micro lending. It is exactly this type of out -of-the-box thinking that creates new opportunities. It is this new way of thinking that would be the primary reason for taking the green real estate financing seminar.

With LEED and The Living Building Challenge gaining momentum, fostering a new language, and offering long-term value for all stakeholders, the time is at hand to capitalize on new innovative methods. I look to Galley Eco Capital to be the thought leader in this direction.

More About → Competitive Edge 3: Communicating the Value of Green Building Using Principles of Real Estate Finance

» Click here to find out more about the workshop and register today for early bird pricing!

» Click here to download the flyer↓

Please pass this on to a friend

Feel forward this post or the course flyer↓ to anyone in your firm or network who you feel would benefit from this course.

Questions about this course? Can’t make the date and want to buy the materials for self-study? Write and let us know!

Energy Star, rigourous performance data shall set you free

“Talk is cheap” might be a tired cliche, but there’s always someone around who seems to forget.

Not a week passes without another example of someone taking the easy way out on verifying green and/or energy efficient performance.   And anyone who cares about green building investing or even just making money from their buildings in the future should be vigilant about avoiding this particularly vicious delusion.

This week’s (most unfortunate) case in point is the US EPA’s EnergyStar appliance certification program, facing accusations of being vulnerable to manufacturer fraud by the General Accountability Office, as featured in the 26 March New York Times.

If you picture the emerging green real estate finance and investment ecosystem as being a giant computer, the US EPA’s EnergyStar Program is the “Intel inside” –  a powerful, branded technology within the nascent green investment “operating system” that drives the circulation of capital into and throughout the nearly $200 billion ecosystem, via providing the market standard in tools to collect and measure building energy data as well as certification regimes for the energy performance of most kinds of buildings and equipment.

EnergyStar is a big player, providing a sort of “software” that systemically links the value proposition of building energy savings throughout communities, environmentalists, investors, and citizens. Look at all the roles it plays in our green real estate finance and investment universe:

• Regulation: Building energy disclosure laws in California and Washington, D.C. are largely premised on the availability of and reliance on EnergyStar.  Regulating building energy disclosure as a part of market transformation is showing early promise in Washington, D.C. where practitioners attribute these new laws to the rise in green building certifications there.

• Green building certification: The US Green Building Council’s LEED 2009 rating systems require achieving an EnergyStar rating of 75 as a prerequisite to certification. Co-Star data (April 2009) indicates 433 million square feet of LEED-certified green building space in operation in California alone. The US Green Building Council estimated that green buildings will represent $180 billion in construction value by year-end 2009.

• Investment best practice: Within ULI’s CLUE 2009 study¹, nearly 80% of the respondents (investment funds, financial services, lenders) indicate that they perform “an explicit analysis of energy efficiency when completing a due diligence review on a project or transaction”.  Among larger property owners and managers, EnergyStar’s Portfolio Manager is as ubiquitous as Microsoft Excel for spreadsheets.

• Property Valuation: Lower exposure to energy supply and price risk is a key tenet supporting the lower operating costs, which partially drives the superior valuation of green and energy efficient (mostly defined as Energy-Star rated) homes and buildings. While we haven’t yet achieved sufficient transaction data to say with certainty the amount of valuation increase attributable to energy efficient buildings, we do know that lower operating costs are a key point of property value and value appreciation is an essential wealth creation mechanism in the United States (current economic climate aside).

• Monetary support: Closer to today’s focus, billions of dollars in taxpayer money and utility fees,  in the form of rebates and incentives, are allocated to support the purchase of EnergyStar-rated appliances and equipment within residential and commercial buildings.

With that in mind, the report about possible fraud vulnerabilities within EnergyStar’s appliance certification system should be a concern for anyone who builds, lives in or operates buildings in the United States.  It is not an understatement to say that the fortune of US green real estate finance and investment is directly linked to that of EnergyStar as a certification, data collection and reporting tool.

To be clear, I am not saying that EnergyStar Portfolio Manager, the energy data and benchmarking tool of choice commercial building owners, is faulty due to the appliance snafu. However, the residential and commercial real estate industry directly relies on EnergyStar-certified appliances and equipment, as well as the taxpayer-funded rebates attached to them. The growth of the green finance and investment industry in the United States, still very much at an early stage, also relies on faith in EnergyStar’s positive reputation, which can be compromised by false performance data on the equipment it certifies.

Add to that the weight of political capital at risk within hundreds of cities with climate action and/or energy conservation goals, based in part on residents and businesses (like property owners) switching to EnergyStar-certified appliances and equipment over the next couple of decades.

EnergyStar, rigorous performance data shall set you free

Trust is built on truth. In green real estate English that means real, vetted performance data.  Smart homeowners and investors deserve the truth about the energy performance of everything and they’ll keep their money in their pockets until you proved it. Don’t forget that the speed of the internet economy can make everybody equally smart about performance data in an instant.

Like Intel chips in computers, EnergyStar is an extremely valuable technology within our green investment “operating system”. Our reliance on it drives billions of dollars of annual growth in green and energy efficient buildings (even in a recession economy).

Nipping appliance certification concerns in the bud is not only a big deal for the EPA, it is an imperative for for the real estate finance and investment industry.

I hope that EnergyStar and the broader real estate industry will recognize what, not to mention how much, we stand to lose if we don’t take swift action to make sure that every aspect of it’s programming and reputation represent the platinum standard in energy performance data, measurement and certification.

¹Sorry to footnote a blog post, but I couldn’t find a link to the ULI 2009 CLUE report anywhere on their site, despite some intense searching. If you do want to look up this citation, and have the study handy, look at survey question #5, on page 8. I only have it in hardcopy form.

Cliffhanger: Which of these investors will earn a green value premium?

Do you believe that achieving a value premium on green properties is possible? Even in the currently tough market?

Well, Jamestown and the State of California have both recently been in the press talking about how they expect to realize extra value from their commercial real estate via green and energy efficiency strategies.

Check out the articles and tell us if you think their projects should earn them greater returns than non-green market peers.

Jamestown: $3-$10 Million Portfolio-wide Retrofit Commitment

Jamestown has committed to greening its entire $4 billion commercial real estate portfolio. In the recent New York Times article about their efforts, they point to their European sensibilities as being the reason why they moved ahead with a portfolio-wide commitment to greening existing buildings.

When  you read through the savings and quick paybacks that they report achieving, it seems clear that their focus is on low-hanging fruit. After all, $3mm-$10mm in retrofit costs are peanuts on a $4 billion portfolio. The good news is that they report realizing immediate savings — meaning permanent increases to property net operating income.

Nonetheless, or perhaps because of that, they focus on the green/energy efficient building’s ability to attract the right kinds of tenants and assure the asset’s sale to a broader pool of buyers. The article showcases several recent efforts, including 999 Peachtree Street in Atlanta, GA, which recently earned LEED-Gold status.

We actively follow how German and other European investors are moving quickly to incorporate comprehensive acquisition and portfolio management sustainability programs. You can read previous posts about these investors’ enhanced criteria and due diligence here. More good stuff –> If you receive Pacesetter, our newsletter, you recently read and downloaded the new EECE study ranking global property funds according to reported and implemented energy efficiency practices.

State of California: Will Green Buildings Net Higher Sales Prices?

The State of California recently put a portfolio of 11 properties, totaling 7.3 million square feet, on the market for sale-leaseback transactions. The State is reporting that these properties, most of them being, in their words, “some of California’s most energy efficient and environmentally friendly properties” could sell for $2 billion, and would be “attractive to a market that is seeking sustainable, green designs.”

What makes this an item worth tracking is that the state official making that quote is also reported as saying that the sale will allow the State of California to “lock-in the lowest rental rates seen in years“.  Bids on the sale are due 14 April. It will be interesting to see the extent to which a green premium can be realized when market or transaction conditions stipulate particularly low rents.  The beauty of real estate is that it is not rocket science — there is no free lunch, and all trade offs come with their price. We are seeing and hearing that, in tough markets, green strategies help to hold back some amount of value deterioration, but are not necessarily rewarded with immediate upside.

That being said, there are multiple angles to watch here.  For instance, the concerns expressed recently by some investors about the mixed-use Boston property that attracted 27 bidders and might close at a “crazy” 6% cap rate.

Why the concern? That cap rate, indicating a valuation far higher than typical for the current point in the real estate cycle (even for Boston), reflects the current shortage of high quality properties combined with a lot of capital on the sidelines. This kind of activity raises fears of a liquidity bubble, even in these tough times, as investors pay up to win what few good deals are available.

That could be a strategy that helps Schwarzenegger shrink the state’s debt woes by more than they would typically recover from the assets.

Yes, the excitement continues!

$20.5 million from DOE helps communities turn trash into cash

The Department of Energy has just announced funding $20.5 million for several community-scale renewable energy projects.

UC Davis & West Village

One of the recipients is West Village, next to UC Davis, which generated a bit of criticism among Green Journey readers the last time we covered them. In partnership with UC Davis, they’ve now received $2.5 million in funding for a waste-to-renewable energy (WTRE) system. The DOE provides an explanation of how the new system should work:

The system would generate power from a renewable biogas-fed fuel cell.  The organic waste will enter a digester to produce biogas from organic wastes. The biogas will power a 300-kW fuel cell, which will work in combination with an advanced battery system to provide power to the campus’

Montpelier, VT

A second community level energy system of interest is the funding of $8 million to the City of Montpelier, Vermont, for a combined heat and power district heating system that will burn sustainably-sourced wood chips and provide 1.8 million KWh to the grid.

The CHP system will be sized to provide heating to the Vermont Capitol Complex, city owned schools, the City Hall Complex, and up to 156 buildings in the community’s designated downtown district for a total of 176 buildings and 1.8 million square feet served.

We follow these announcements with lots of interest, since we work with partners to identify the best combination of financing streams for achieving community-level sustainability.

As we continue to study eco-districts and similar low-carbon neighborhoods in various stages of design and planning around the world, district-level renewable energy infrastructure  — particularly waste-to-renewable-energy comes up time and time again within the case studies of the more successful communities.

A more in depth discussion of the ’success factors’ within green communities will definitely make for an exciting post in the near future as we consolidate our findings.

Video explains value of district energy

Some of these technical terms might be outside of the typical real estate finance and investment discussion, so I found a 40 second video that explains how district energy saves buildings money. Email subscribers should click on this link to go to the video.

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