REAL ESTATE - The California Public Employees Retirement System (CalPERS) has acquired a controlling interest in the first investment of its sustainable real estate fund.
The Green Development fund, a joint venture with real estate firm Hines, focuses on office project development across the US. Announcing the fund鈥檚 first closure with $120m of committed equity, Hines said it expected completion of Tower 333, a 20-story Washington office block, in the fourth quarter of 2007.
In a press statement, fund manager Dan Rashin said: 鈥淭he real estate industry is finally ready for green.鈥� Yet he acknowledged to 麻豆映画 Real Estate that 鈥測ou can鈥檛 point to specific investment in green and tie specific returns to that investment鈥�.
鈥淭his is a development fund, so we control the design process, allowing us to incorporate green concepts into the building from the outset,鈥� he added. 鈥淚n that sense, the real difficulty is the one we always face, which is finding opportunities in those markets where development will be profitable.鈥�
The fund has no target allocation for sustainable real estate and any target 鈥渕ay be premature,鈥� according to CalPERS spokesman Clark McKinley.
鈥淕enerally, investments that have a strong environmental component certainly are more scarce than the usual opportunities,鈥� McKinley said. 鈥淲e have found in our other asset classes that it's one thing to earmark funds for [green] investments, and another to find actual projects.鈥�
The fund鈥檚 aim to diversify up to 50% of its real estate investment into global markets is unlikely to spur its efforts to meet an energy reduction target of 20% within five years.
鈥淭here could be some lag time as international markets, particularly in developing countries, catch on to the need for sustainable buildings,鈥� said McKinley.
