In 2006 real estate investment in green buildings grew dramatically with the announcement of a joint venture by the California Public Employees Retirement System (CalPERS) to fund future commercial real estate projects by the Hines development organization. A large national real estate developer, Hines is well-known for its commitment to Energy Star and LEED certification for its buildings.80 The Hines CalPERS Green Development Fund (HCG) was capitalized with over $120 million of committed equity and, with leverage, will have the ability to invest up to $500 million. HCG will concentrate on developing high-performance, sustainable office buildings certifiable through the LEED for Core and Shell Program.
A number of publicly traded Real Estate Investment Trusts (REITs) have also begun to make strong commitments to green buildings, including Liberty Property Trust (Philadelphia, PA)81 and Corporate Office Properties Trust (Columbia, MD).82 In addition, major private investors have begun to develop large green projects. Two notable examples are Gerding Edlen Development in Portland, Oregon, and Vulcan Real Estate in Seattle, Washington. By the end of 2006, Gerding Edlen registered more than 30 development projects on the West Coast for certification under the LEED system and developed the world's largest LEED Platinum building (to date, at 16 stories and 412,000 square feet), the Center for Health and Healing at Oregon Health & Science University in Portland.83 Vulcan is developing a number of properties in Seattle's South Lake Union district to LEED standards.84
Investing in green buildings has begun to attract considerable attention as a form of socially responsible investing, a practice that is growing faster than overall investing. According to one socially responsible property investing expert, Professor Gary Pivo at the University of Arizona:
We have yet to see the first real estate investment fund squarely committed to green real estate. But until such funds are created, there are some other options worth considering. One is to acquire shares in companies that commonly own Energy Starlabeled buildings or have been recognized by Energy Star for their conservation efforts. Examples include Arden Realty, Equity Office Properties, Hines, Brandywine Realty, Carr America, Glen-borough Realty, Parkway Properties, Prentiss Properties and USAA Realty.85
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