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 are 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
</p>
Contact: Rona Fried
+1-631-423-3277
rona@sustainablebusiness.com
Web site: http://www.sustainablebusiness.com
http://www.sustainablebusiness.com/progressiveinvestor/index.cfm
>
Progressive Investor
Rona Fried for Progressive Investor, +1-631-423-3277, rona@sustainablebusiness.com
