There are hardcore real estate heads out there, probably, who are very aware of German commercial real estate company Jamestown Properties. All I can do is salute those people. For me, the Jamestown Properties of the world — which the New York Times identifies as “an acquisition and management firm based in Cologne, Germany, and Atlanta, has invested $12 billion in commercial properties in the United States since 1983 through private equity funds for German investors” — are shadowy entities. (I can never quite tell what Britt Daniel is writing about, but the Spoon song “Who Makes Your Money” came to mind during my reading about Jamestown). In one of their rare turns in the gbNYC spotlight, though, Jamestown is acquitting itself well. Jamestown recently announced a commitment to do up to $10 million worth of green retrofits on its entire U.S. building portfolio. Given the size of Jamestown’s $4 billion portfolio, that’s a lot of buildings, with such major New York City properties as LEED Gold-hopeful 1250 Broadway and Chelsea Market among them.
While Jamestown isn’t doing this out of the goodness of its Multinational Corporate Heart — they’ll make their money back through energy savings and higher rents and sale prices — their choice carries with it a number of heartening potential effects. In the Times, Alison Gregor explains the possible curve-bending effects of Jamestown’s decision to green its fleet. While not all of the Jamestown greenings will be submitted for third-party certification — Chelsea Market, for instance, is too sprawling and too old to be much of a LEED candidate — that choice seems actually to have led to a more innovative approach on the company’s part. Rather than looking to pile up LEED points with a bunch of bike racks, for instance, Jamestown plans to add a green rooftop garden space atop Chelsea Market. While that’s great for dorks like us, Jamestown has already provided a sterling example to less forward-thinking developers through its work at 1250 Broadway, where an energy audit on the 770,000-square-foot, circa-1968 commercial building led to changes that have already cut emissions and energy consumption by 15 percent. The 1250 Broadway audit is slated to recoup its $350,000 cost within the next 12 months.
The truest impact of Jamestown’s decision to go all-green with its holdings, though, will probably be indirect. Macro-scale developers are, for some very easily comprehended economic reasons, not necessarily the most forward-thinking bunch — for them, the first cost of a building is the only cost that really matters, since they’re not going to have to pay the gas bill once it gets sold, and even with the narrowing of the cost gap it still costs more to build green than not. But the market pressure exerted by a major buyer like Jamestown Properties’ decision to invest only in green buildings should effectively change the incentives somewhat, according to Jon Boggiano, a Charlotte-based efficiency expert quoted in Gregor’s piece. “Unless the capital that’s buying buildings is willing to pay for true sustainability,” Boggiano told Gregor, “developers are going to go for cheaper costs. So if a fund is willing to say that green is going to be one of our criteria, and they’re willing to invest in those front costs, that actually is the best way to have an impact.” We certainly hope so, and would suggest that Jamestown might look into a commitment to green leasing if they’re thinking of doubling down.