Multi-Housing News - August 2009 - (Page 11)

finance & investment Green Lending How eco-friendly funding sources are influencing, and building, the multifamily communities of the future By Christopher Hosford, Contributing Editor s eco-consciousness continues to gather momentum politically and in the social fabric, a commitment to green construction and operation is keeping pace. One of the less-publicized examples of this is “green lending,” where developers of commercial structures, including multifamily communities, seek building loans specifically geared toward doing right by the environment. “This is a broad social trend that’s affecting the industry enormously,” says Fred Harris, senior vice president of development with AvalonBay Communities, which has developed several green-oriented communities. He cites in particular urban projects, the infield developments that involve the development of apartment communities in downtown city cores. These often entail cleaning up “brownfield” areas of previous pollution, while adhering to new concepts of green continuing operation. “For the next generation of renters, in their 20s and 30s, their green orientation is off the charts,” Harris observes. “So I think that’s here to stay in a big way. How the incentives to building this way work remains to be seen, but in the coming days A there probably will be more direct economic incentives. In the long-term, more people will be making economically rational choices that will be green, because incentive structures will be set up in that direction,” he adds. While AvalonBay largely self-finances its communities with equity, Harris notes that “incentive structures” include lending institutions and brokers. Consider NorthMarq Capital, which spearheaded the $26.7 million financing of Riva on The Park (originally named Alexan South Waterfront), a 294-unit, 22-story high-rise apartment community in an old industrial area south of Portland, Ore.’s downtown core, and completed this spring. Riva on The Park is considered a leading-edge example of green development. The developer of Riva on The Park, Trammel Crow Residential, is expected to reach Gold level certification, as designated by the Leadership in Energy and Environmental Design (LEED) program, which encourages and recognizes eco-friendly structures. The project is Trammell Crow’s first LEED-certified building in the nation and is expected to be 35 percent more energy efficient, using 40 percent less water than a comparable non-green building. More than good intentions Kerry French, managing director of NorthMarq’s Houston office, who spearheaded the loan deal, is clear that much more than good intentions were at work in the development’s green orientation. “This property is thought to have much greater value because of its green designation through LEED,” French says. “The construction lender and the investor signed off on that early on as being a benefit. Yes, there are some added costs, but because Portland is dense, part of the qualifications that would allow LEED were being required by Portland anyway,” she notes. Perhaps part of the reason why some lenders and developers are seeking loans intended to spur green Above, left: Avalon Riverview North is an example of “brown-togreen” development. Above, right: Trammel Crow’s Riva on The Park, a LEED Gold community, benefitted from construction financing from “green” mortgage banker NorthMarq Capital. www.multi-housingnews.com | August 2009 11 http://www.multi-housingnews.com

Table of Contents for the Digital Edition of Multi-Housing News - August 2009

Multi-Housing News - August 2009
Contents
From the Editor
Executive Insight: David Hendrickson, JLL
Market Pulse
Operations
Finance: Green Lenders
Property Management: Mentoring
Development & Design: Green
Profile: AMLI
Market Report: Florida
Kitchen & Bath: Saving Water
Products: Paints & Finishes
Technology: Resident Screening
Perspective: Leasing Practices

Multi-Housing News - August 2009