GlobeSt.com reportedrecently

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Denver-based ProLogis, the world's largest owner of industrialproperties, is the first participant in the SCE initiative. Butthis is not ProLogis' first foray into utilizing rooftop realestate for solar panel installation, and it certainly is not itslast. Roof-mounted solar panels are in place at ProLogis ParkChanteloup in France and at ProLogis Park Penedes in Spain. TheEuropean agreements are different from the one in California. DrewTorbin, manager of sustainability for ProLogis, tells GlobeSt.com,"we own the solar array at the European locations under afeed-in-tariff agreement."

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Under the agreement, ProLogis sells the electricity to customersin Europe. Thus, the firm profits from the sales in the same way autility company would.

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In the SCE agreement, the utility company owns the solar arrayon space it leases from ProLogis. The initial installation is forthe 607,000-sf roof at 13230 San Bernadino Ave. here. NeitherTorbin nor Gil Alexander, spokesman for SCE, would disclose thelease rate.

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Among the factors in evaluating a rent rate, Torbin says, is thevalue of the space to the utility company, and "the risk we run byputting panels on the roof. We have important customers under thatroof." Another factor is comparable rates to rent that space toother potential users. "We've never leased roof space for anythingbefore," Torbin says, "but we have had offers." Cell phonecompanies, for example, have sought to build towers on industrialrooftops, and companies have looked to place billboards there.

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ProLogis will also generate fees as the installation andconstruction manager of the project. That "aligns risk," Torbinsays. "It's our asset and our tenants. Racking up solar panels isfairly basic."

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Prior to clinching the deal, ProLogis discussed the project withbuilding tenants. "They were thrilled," Torbin says, even thoughthe electricity generated by the panels does not supply thebuilding. It goes to surrounding residential areas. The panelsshade the building, which does provide some small benefit, Torbinsays, but the real reason for tenants' enthusiasm is, "they wantedto be a part of this." For the same reason, ProLogis landed atenant at its solar-panel-topped facility in France.

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The SCE initiative has a projected investment of $875 million.ProLogis owns 180 distribution facilities aggregating more than 41million sf in SCE's territory alone. While negotiating foradditional SCE installations on those properties, the company isalso in negotiations with other utility companies elsewhere in theUS and abroad.

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In all, ProLogis owns more than 510 million sf of industrialrooftop real estate worldwide. The benefit of using rooftop space,SCE's Alexander points out, is that the electricity "goes rightwhere the customers are. In dessert locations, there's sun, but nocustomers."

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