NEW YORK CITY-Dutch real estate firm OVG Real Estate pledged $1 billion toward sustainable building practices Wednesday at the Clinton Global Initiative’s annual meeting. This is the firm’s second such commitment.
Over the next five years, OVG’s fund will focus on retrofitting existing buildings in C-40 cities, Coen van Oostrom, founder and CEO of OVG Real Estate tells GlobeSt.com. It’s a need that’s brought about by the age of the existing stock of buildings in cities like London, Paris and New York.
“The big difficulty that we see around the world is that in the current stock—in New York, in London, in Paris—so many buildings have been built 100 years ago or have been built 20 years ago and they’re using an enormous amount of energy,” van Oostrom says. “What we want to do is give as many examples as possible in those 40 big cities of how to retrofit those buildings. For example, we’re now negotiating with the city of London to see if we can buy a couple of buildings that the city owns.”
Those London buildings would be retrofitted and then leased back to the city—an example of how the initiative works. Energy use, van Oostrom says, could be reduced by as much as 60%. Financial and technical information from retrofitted buildings would then be warehoused on a website, and discussed at the C-40 conferences.
Christopher Cayten, managing director at CodeGreen Solutions, agrees that New York’s stock of buildings is ripe for retrofitting. “From our perspective, a lot of the buildings in New York are older buildings that have great infrastructure and bones,” Cayten says. “But, essentially, the uses as they stand today are very different than when they were designed.”
Cayten’s group provides sustainability and energy efficiency consultation services, helping buildings achieve LEED certification and to comply with green energy laws. Though he was unfamiliar with the OVG fund, he says that retrofitting buildings provides cost savings, particularly in dense cities like New York.
“The greenest thing to do is not to build a new building but to retrofit an existing one,” he says. “It’s most energy efficient to take advantage of existing stock.”
As for van Oostrom and his plans for targeting New York City’s stock, he says that the group has been in touch with the Bloomberg administration and is working to identify opportunities. He anticipates that participating buildings will be announced later this year, or early 2012.
“We have a list of opportunities that we see in the market and we are looking for deals and the possibility to have a return on equity, because it’s a fund and we promised the potential investors that it’s all going to be profitable,” van Oostrom says, adding that “New York is top of the list.”
The previous $1 billion pledge, in a fund launched in 2007, has been dispersed and was spent to build new construction that was energy efficient already. That commitment ended in 2010, two years early, and resulted in the construction of buildings such as the LEED Platinum TNT GreenOffice headquarters in Hoofddorp, the Netherlands.