The “revolutionary” green bond financing for the ambitious Destiny USA mega-mall project in Syracuse, New York may lose its tax-exempt status because the developer has failed to incorporate certain green design features as promised in its application to the IRS for the exemption.
The news that CBRE Capital Partners has originated $61 million in financing for the LEED Gold-hopeful Riverhouse condominium project also provides a bit of backdrop to the fledgling Gidumal litigation.
Not all green retrofits get as much attention as The Empire State Building’s. A new study dedicated to figuring out the green (and economic) worth of retrofits looks to change that.
In one of their rare turns in the gbNYC spotlight, Jamestown Properties 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.
In a decision with implications for owners and lenders, the Appellate Division for New York State’s Fourth Department recently upheld a preliminary injunction in favor of the Destiny USA development in Syracuse based explicitly on the project’s green features.
Anyone predicting the emergence of a large and lucrative market at our nation’s present economic ebb is going to get attention, but Greg Kats deserves more attention than, say, Larry Kudlow or the clowns who wrote Dow Eleventy Zillion. A former member of Bill Clinton’s Department of Energy, Kats is now the senior director of the New York-based venture capital firm Good Energies Inc., and he recently issued the results of a two-year, independently-financed report in a book called Greening Our Built World. To call Kats’ conclusions bullish is, frankly, kind of an insult to bulls. But while Kats’ projection that 50 percent of the non-residential building stock in the U.S. will qualify as “green” by 2015 is dramatic — especially since the current figure is 15 percent — it’s not exactly James Glassman and Kevin Hassett predicting that the Dow will hit infinity by 2002 as long as we repeal the Glass-Steagall Act. That is to say, Kats actually makes it seem possible.
The Enterprise Green Communities criteria will serve as the basis of the pilot, which is part of Mayor Bloomberg’s New Housing Marketplace Plan, an initiative aiming to create sufficient affordable housing for 500,000 New Yorkers.
Last week, the Royal Institution of Chartered Surveyors (“RICS”) released the results of a study authored by Piet Eichholtz and Nils Kok of Maastricht University and John Quigley of Berkeley. Titled “Doing Well By Doing Good? An Analysis of the Financial Performance of Green Office Buildings in the USA,” the purpose of the study was to determine whether investors are currently willing to pay any premium for green (Energy Star- and LEED-certified) commercial office buildings and, if so, what that premium is. The authors identified 1360 buildings- 286 LEED-certified, 1045 Energy Star-certified, and 29 certified under both systems- and were able to obtain complete building characteristics and monthly rents from CoStar for 649 of them, as well as sales data for 199 buildings that swapped hands between 2004 and 2007. To create a pool of peer buildings, the authors used the CoStar database to identify all other office buildings within a quarter mile radius of the subject green building to create a “cluster” of buildings for each of the 893 subject buildings. The study concluded that “the type of label matters. We find consistent and statistically significant effects in the marketplace for the Energy Star-labeled buildings. We find no significant market effects associated with the LEED label. Energy Star concentrates on energy use, while the LEED label is much broader in scope. Our results suggest that tenants and investors are willing to pay more for an energy-efficient building, but not for a building advertised as ‘sustainable’ in a broader sense.”
I took great interest in a number of the documents that NAIOP released in the aftermath of its controversial energy efficiency study. The organization has compiled both an FAQ and fact sheet detailing the various assumptions it made and conclusions it drew in an effort to clarify some of the unproductive vitriol that has flown around the web over the past month decrying its conclusion that 30 percent energy reductions are not practicable for the majority of commercial office properties. Both the fact sheet and FAQ are available on NAIOP’s web site and point out that the results of the study do not apply to all buildings; “[t]he study analyzes a typical office building that represents more than 50 percent of new Class A construction [that took place] in 2008.” NAIOP also clarifies that the subject building is a real 95,000-square-foot, speculative commercial office property in California, and claims that the results of its study show what’s possible for the “vast majority of new construction without having to redesign a typical office building,” calling the results “impressive.”
The country’s first real estate fund focused exclusively on acquiring – and retrofitting – green buildings has made its first New York City acquisition, in Harlem.