and The Shops at Valley Square

GlobeSt.com: Is it hard to convince property owners of the value of sustainability in the recession when they might perceive high initial costs?

Dinenberg: When we go and meet with a client for the first time, we explain the renewable that we suggest we go forward with. As far as capital costs are concerned, we have a structure that alleviates all of the costs for the end user. In essence, we pay for the system, the installation and equipment and just pass the direct savings on to the owner of the real estate. If they can't go out and get the financing because of the liquidity crunch that we're in, and they have their business that they need their core capital for, we can alleviate that whole problem. We'll pay for the system, and then we basically act as a utility company selling them the electricity at a discounted price.

GlobeSt.com: Different states have different incentives for energy saving. Is this a regional thing or is every state different?

Dinenberg: It's specifically state by state. Some states have something called a renewable portfolio standard, which is, in essence, driving that state's requirement to have alternative energy as an offering through their utility companies. There are about 15 states right now that have the portfolio standard, and there is legislation to make it a national standard. Right now there are only 15 states, and they have different incentives to drive the production of alternative energy. So it is state by state and in some cases county by county or utility by utility.

GlobeSt.com: How does what you do fit in with the whole LEED certification process?

Dinenberg: It gives points toward LEED certification, but alternative energy is almost one step past LEED. LEED makes the building effectively efficient and uses what you currently have in place. Alternative energy is really trying to get to the core of some of the issues we deal with globally; for instance, the oil spill we're dealing with off the Gulf Coast. Alternative energy is really trying to replace our standard, coal burning fossil-fueled utility. We're trying to produce our own utility without using any of those natural resources.

GlobeSt.com: Are there any types of projects in which these are easier to implement than others?

Dinenberg: On a landlord basis, it really comes down to how the leases are put into place. Depending on how the current leases are in place, the savings we drive will differ. In the first meeting we have dialogue about the structure of the building. Is it separately metered? Is it one main meter? We're able to offer them alternatives in almost any circumstance.

GlobeSt.com: Due to vacancies in the retail sector, landlords are signing tenants at much lower rents than before. Are you finding more interest in your services due to these types of situations?

Dinenberg: It goes hand in hand with that strategy. If there's an empty space and you have an alternative energy generating system, you have a lower cost per square foot to bring in and attract new retailers to the empty space. It's a competitive advantage versus the shopping center next door. Also, finding a facility that is an actual alternative energy producing system is far and above most people's expectations right now.

GlobeSt.com: How can these actions help an owner with a distressed property?

Dinenberg: It depends on the level of the distress. Typically, what somebody might be able to do at an early stage is to work with the preferred mortgage holder of the facility, incorporate an alternative-generating system, and the savings side of it is going to produce revenue to help pay for that site. Distressed properties can help manage the situation by going through the current mortgage holder, reworking whatever debt is there and including the financing to build a system and bring in additional revenue.

GlobeSt.com: How do you think the commercial real estate industry measures up to other businesses in sustainability efforts?

Dinenberg: Real estate is certainly catching on. There are more buildings being LEED certified. Especially through the downturn, implementing alternative energy has been a real positive way to generate revenue or cut costs.

Instant Insights /

SP-One's Dinenberg on Alternative Energy

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