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Published on: 11/17/2007
Last Visited: 11/18/2007
"In terms of the building stock, only 1 percent is new construction annually, so it is critical to focus on the existing 99 percent, which are huge consumers of energy," said Nathan Taft, who manages acquisitions for the Rose Smart Growth Investment Fund.
Green renovations of existing buildings, he said, are economically viable.In the case of the Joseph Vance building, the green renovation has allowed the company to command higher rent: before the renovation, tenants paid between $16 and $20 a square foot; the value has grown by at least $4 to $6 a square foot, and the renovation will cut overall operating costs.
"We believe that our green strategy, combined with our focus on mass-transit accessibility, is just a smart real estate strategy that will increase building operation efficiency, decrease expenses, increase marketability and the top line, and lead to improved net operating income and value," Taft said.
The Fund paid $23.1 million for the Joseph Vance Building -- and the smaller, adjacent Sterling Building -- in April 2006.Both were located in close proximity to mass transit but the Joseph Vance Building needed to be "repositioned," Taft said.
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"We've taken those out to great benefit," Taft said.
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"You can't force it on everyone but you can educate and provide lots of opportunity," Taft said.
About 82 percent of the building is currently leased with a number of leases pending, Taft said.The company has renovated about 20,000 square feet of vacant office space so far, as well as about 15,000 square feet of tenant occupied space.
The response has been favorable."People are attracted to the green features," Taft said.