Reporting from MIPIM: What happens to "brown" properties in a "green" world?

Reporting from MIPIM 2012:

Have we truly turned a corner on sustainable building practices, no longer focused on whether or not it's feasible to embrace these new techniques but shifting instead to the challenges faced by the structures that don't (or can't) go "green"?

It appears that the question of whether sustainable building is a positive net present value investment has been answered and the industry has now turned to the difficult task of large scale implementation. That was the conclusion of this morning's session at MIPIM "Sustainable Property Investment: Does Good Mean Good Value?"

Sustainable buildings have been proven to outperform conventional buildings in a variety of value metrics. Demand is building for standardized data collection and the creation of a "green" index. This would allow for greater transparency regarding green benefits and allow buyers and sellers to make more informed decisions. Although state governments and market observers have sought to gather data about the performance of sustainable buildings, finding a way to share this data has proved to be quite difficult. The ability to provide accurate and applicable data regarding green buildings is the greatest challenge that the field faces in the near future.

The next phase of the transition to sustainability is the functional obsolescence that will accumulate to non-green buildings in the future. These so-called 'brown discounts' were estimated to be substantial and will only grow. Conventional buildings will lose their competitive position and owners of these properties should anticipate major re-positioning or decreases in value. There is no timeline or magnitude of brown discounts yet, but this prospect is certainly one of the most troubling threats (or is it an opportunity?) in real estate today.


For more coverage of discussions and developments at MIPIM, check our blog and visit the official MIPIM blog.

Building a standard for measuring sustainability

Reporting from MIPIM, "Common causes, common measures:"

Countries around the world have varying standards for measuring sustainability, from LEED in the United States to BREEAM in Europe. Further, governments are instituting laws designed to force investors and developers into incorporating energy saving measures. Forces which are combining to demonstrate the clear need for a common standard of "sustainability" for commercial properties. The lack of coordination in the industry across the world is greatly reducing transparency; it is nearly impossible to compile statistics for energy savings achieved across the world due the implementation of these programs because the standards vary so widely.

Photo courtesy of Reed Midem.

MIPIM 2010: "New Cities"

Wisconsin Real Estate MBAs report from MIPIM 2010:

Panel: Concept of “New Cities” in Morocco: Investment Opportunities & ROI

The “New Cities” concept, better known as the no-shantytown concept, aims to rid Morocco of unsound, blighted housing units. Obviously this has resulted in a huge demand in housing which in turn is providing huge opportunities for foreign investors. The Moroccan government is looking to public/private partnerships to achieve this goal and is providing tax and procedural incentives to entice foreign development. Morocco hopes that its close location to Europe, very stable reputation, growing population and growing GDP will make it an investment destination.

For more coverage of MIPIM 2010, visit our partner CREOpoint.com.

MIPIM 2010: Universal green building standards--needed but possible?

Wisconsin Real Estate MBAs report from MIPIM 2010:

Panel: Sustainability "Sans Frontiéres" - Achieving Equally Green Buildings around the World

There is a need for a universal green building standard, yet key issues are preventing its development. Among the problems facing the standard are: carbon ownership (does it belong to building owner or tenant?), public transparency regarding energy efficiency, and the difficulties of placing value on the sustainability of a building. All of which depend on metrics—using the wrong metric to measure this concept, and it may ultimately render the sustainability concept worthless.

For more coverage of MIPIM 2010, visit our partner CREOpoint.com.

MIPIM 2010: Hurdles and solutions to Kyoto in Portland

Wisconsin Real Estate MBAs report from MIPIM 2010:

Keynote: Ralph DiNola, Green Building Services Incorporated

Portland, Oregon is U.S.'s first city to adhere to the Kyoto Protocol. It has faced a number of hurdles to its green strategy. Buildings are the greatest energy consumer at more than 40% of the total pie. New construction is only accountable for 1% of the building stock in any given year. If real impact is going to be made, it will have to begin with renovating existing buildings. Closing the gap between design, construction, and operations and maintenance, using technology efficiently, placing proper value on green features, and overcoming the inertia of our lifestyles will help other cities achieve a successful green strategy.

For more coverage of MIPIM 2010, visit our partner CREOpoint.com.

First Green Capital of Europe

A group of first year real estate MBA students from the Wisconsin School of Business are at MIPIM this week, attending the sessions and reporting back on the discussion points and key takeaways. The Graaskamp Center for Real Estate has partnered with MIPIM and CREOpoint to bring this timely info to you. You can view today's and the rest of the conference schedule here.

Our reports from Wednesday's sessions continue:

Keynote Address by Sten Nordin, Mayor of Stockholm
Stockholm’s hard work to become a leader in green technology has been recognized by the EU with the award of the first annual Green Capital of Europe for 2010. The city hopes to use this recognition to help spread their values of sustainability to the rest of the world.

Active measures to reduce carbon emissions are already in place. The Mayor emphasized that the city cannot rest on its laurels and has great plans to continue its innovative practices in the future. Stockholm is on pace to have zero carbon emissions for the entire city by 2050.