Real Estate Industry Quietly Embracing Green Development, Progressive Investor Reports
June 19 2007 - 9:15AM
PR Newswire (US)
NEW YORK, June 19 /PRNewswire/ -- Although much less public than
the major media announcements of the world's largest corporations,
GE and Wal-Mart, the real estate industry is quietly transforming
by embracing sustainable business practices and green technologies.
In an analysis of the industry, Progressive Investor reports that
41% of the 300 U.S. real estate investment trusts (REITs) are
actively pursuing energy efficiency and green building upgrades and
another 27% plan to do so. Yet, we found that most
social/environmental investors (SRI) aren't aware of even one
investment option in the area that meets their criteria -- one of
the few asset classes that remains a hole for SRI portfolios. "That
will change over the next few years," predicts Rona Fried,
Progressive Investor CEO. "Industry leaders are forming a
responsible property trade association, creating criteria for
certification, integrating green building into the appraisal
process and into broker databases," she says. Progressive Investor
identified the following drivers for the trend: -- Developers and
building owners are feeling the crunch of high energy and water
costs, which, according to the Building Owners and Managers
Association (BOMA), constitute 28% of operating costs for downtown
office properties, and 30.4% for suburban properties. They see the
quick payback and cost savings energy efficiency and other green
building upgrades offer. -- Building green no longer costs more.
Turner Construction's 2005 Green Building Market Barometer shows it
costs a mere 0.8% more for basic LEED certification, easily
recouped through lower operating costs. -- Increasingly, clients
and tenants show a preference for green buildings, which have been
proven to increase productivity, retain employees and lower
absenteeism. The combination of reduced operating costs and more
satisfied occupants translates into 3.5% higher occupancy rates, 3%
higher rents, and a 7.5% increase in building value, says the
McGraw-Hill 2006 SmartMarket Report. -- Corporations with
sustainable business policies are building highly visible green
headquarters including Bank of America, Toyota, Goldman Sachs,
Hearst, IBM, JPMorgan Chase and Herman Miller. The Freedom Tower,
which replaces the World Trade Center, will be LEED-certified. --
Green building is increasingly being mandated. Nine states and 40+
municipalities have passed legislation mandating LEED-certified
buildings. -- Real estate firms see the writing on the wall and are
nervous about holding a portfolio of obsolete, inefficient
buildings. "The benefits will make green ubiquitous over the next
two years," says George Caraghiaur, vice president for energy
services at Simon Property Group (NYSE:SPG), owner of 300 shopping
malls. "We're happy to have caught this trend at the beginning." 6%
of commercial developments are LEED-certified, projected to jump to
10% of the market by 2010. Buildings produce 21% of the world's CO2
emissions (38% in the US), more than transportation or
manufacturing. About 15 million new buildings will be added by
2015. Commercial buildings, the largest polluter, are expected to
grow emissions 1.8% a year through 2030. A recent United Nations
study concluded that green buildings can do more to fight global
warming than all curbs on greenhouse gases agreed under the Kyoto
Protocol, while saving billions of dollars. For now, US investors
can gain exposure to the sector through the Forward Progressive
Real Estate Fund (FFREX), the first SRI REIT mutual fund, and
through about two dozen individual securities, including Simon
Property Group (NYSE:SPG), Weingarten Realty Investors (NYSE:WRI),
Prologis (NYSE:PLD) and SL Green Realty (NYSE:SLG). Outside the US,
leaders include Investa Property Group (IPG.AX), Australia's
largest owner of prime grade office space, Lend Lease (LLC.AX),
Land Securities (LAND.L), British Land (BLND.L) and SEGRO (SGRO.L),
in the UK. Progressive firms are increasingly focused on urban
infill buildings rather than suburban greenfields and incorporating
advanced energy efficiency measures, as well as recycled building
materials, gray water systems, rainwater capture and green roofs,
the report says. Progressive Investor is a monthly newsletter that
guides investors and advisors toward sustainable investments. It
covers all renewable energy sectors, healthy lifestyle, green
building and more.
http://www.sustainablebusiness.com/progressiveinvestor/index.cfm
Contact: Rona Fried 631-423-3277 DATASOURCE: Progressive Investor
CONTACT: Rona Fried for Progressive Investor, +1-631-423-3277, Web
site: http://www.sustainablebusiness.com/
http://www.sustainablebusiness.com/progressiveinvestor/index.cfm
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