Articles With "Lending" Tag

Finding Equity Partners + Green Development

Green Equity Partners

UPDATE: 4/27/08 – the market has changed substantially since writing this article and some of the green funds I was in touch with are no longer looking for deals. 

Hey green developers, I’m not sure what stage of planning you’re in and whether you’ve completely figured out your capital stack, but I have some information that may be of assistance in finding a good equity partner.  Feel free to shoot me an email at jetsongreen at yahoo.com, and I can get back to you.  In your email, let me know the company you’re with and some quick details about the green project you are planning.  I may be able to help developers with the following general characteristics:

  • Experienced developer of LEED or other third-party green certified real estate assets;
  • A reputation for quality and excellence in development;
  • Track record of handling projects averaging $50-$75M or more;
  • Looking for equity financing for a green development in any real estate product type.

I’m not promising anything, I’m just saying, depending on your situation, I may have information on a good source for equity capital from people that know green development. 

Ramifications: GE Real Estate Moving to New, Potentially LEED-CI Headquarters

GE Real Estate

You may not think this news is all that sexy, but it’s a pretty big deal.  GE Real Estate is an enormous source of capital funding for commercial properties.  To get an idea of what we’re talking about, here are the figures:  their portfolio is weighted heavier in equity investments at 54% with the other 46% in debt investments; the average investment size is roughly $6.5 million; in 2006, GE RE closed $29 billion in real estate transactions; GE RE has $59 billion in total assets.  Long story short, GE Real Estate is a star player in the real estate lending game, and since they invest more on the equity side (and equity investments are smaller than debt investments), they work with tons of customers.

So starting June 25, 2007, GE Real Estate will operate from its new headquarters in Norwalk, Connecticut, at 901 Main Avenue.  901 Main Avenue is a class A+ property and it’s not inherently green.  BUT, GE RE has registered with the USGBC to go green on the 3rd, 4th, and 5th floors under the LEED-CI (Commercial Interiors) certification system.  LEED Registration is not a guarantee of anything, the project still must be certified upon completion. 

Here’s my take: 
When GE RE is done greening the interiors, people are going to start talking about it.  Employees will like the green building.  The financial benefits of the green building will stand out.  And all those people working inside will start to ask developers why they aren’t pursuing LEED certification, if they aren’t going green.  Now capital is abundant, so this talk will be nothing more than a mere ‘suggestion,’ but eventually, developers will listen and there will be a trickle down.  I’m calling it right now.  GE RE is going to ‘sneeze’ green on their customers and we’re going to see a major ‘tipping point’ in the real estate development industry.  Anyone agree?

One Bryant Park, Greenest Skyscraper in the World? (S2)

One Bryant Park Rendering

If you’re going to office in what looks to be the greenest skyscraper in the country, you should also have a sustainable business strategy to go along with it.  One Bryant Park, soon to be known as the Bank of America Tower, is the perfect place for a company that just announced a $20B initiative to support environmental lending.  Designed by Cook + Fox Architects and developed by the Durst Organization, One Bryant Park is shooting for LEED Platinum certification.  It’s a 2.1 million sf, 54-story, crystalline office tower located right in midtown Manhattan and is slated for completion in 2008. 

ABC News recently ran an article on some of the more interesting green features of the building.  Interestingly, it will only cost about 1-2% extra (of a total $1.2B) to include all the green additions, but those are expected to be paid for within a 2-4 year window as a result of saved energy expenses.  That’s the business case for green building.  There will be rainwater capture, floor-to-ceiling windows for natural lighting, advanced double wall technology to allow light and block heat, air cleaned of 95% of its particle matter, a floor duct air system controllable in each room or office, three state-of-the-art natural gas fuel cells to create on-site energy, building concrete made of 45% blast furnace slag for stronger construction, and daylight dimming and LED lights for reduced electric usage.  The result:  these green additions have the anticipated benefits of reducing energy consumption by 50%, reducing potable water consumption by 50%, reducing storm water contribution by 95%, and using about 50% recycled materials in construction.  That’s a lighter footprint. 

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