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John McCloud is editor of Industry Property Journal, from which this article is excerpted.

Hillsboro, OR—Earlier this month, a German solar panel manufacturer bought a 400,000-sf former computer chip manufacturing plant in this Portland suburb. The deal coincided with another solar power company’s decision to lease 175,000 sf in a reconditioned factory in Richmond, CA. Together, they underscore the rapidity with which solar energy is becoming a standard part of the industrial landscape.

In Hillsboro, Benaroya Co. and Real Property Investors, both of Seattle, sold the Oregon Technology Center to Solarworld AG of Bonn, Germany for $40 million. In Richmond, PowerLight, a subsidiary of San Jose-based SunPower Corp., finalized a lease in Ford Point, a 520,000-sf historic Ford Motor Co. assembly plant that Orton Development Inc. of Emeryville, CA is converting for contemporary use. SunPower executives say the 75-year-old building’s abundant windows that bring daylight to its interior space played a role in its location decision.

But it’s not just solar power that’s making its mark. A whole range of environmentally conscious products and processes are springing up in response to concerns about environmental sustainability and global warming. Coined clean tech or green tech, the field has attracted the attention of venture capitalists, who are seeding both start-ups and helping established companies grow larger, with the expectation the highly diversified industry will show explosive growth during the coming decade.

The Cleantech Venture Network LLC, a San Francisco-based organization that defines its mission as accelerating “the growth of investment into venture-grade companies deploying ‘clean’ technologies,” tracked $2.9 billion of clean tech investment in North America last year, a 78% increase from 2005. Using a narrower definition, London-based Dow Jones VentureOne and San Francisco-based Ernst & Young estimate $1.28 billion was invested in these industries in China, Europe, Israel and the US in 2006, compared with $664.1 million a year earlier. Of the total, US investments accounted for $884 million of last year’s total, up 80% from $491 million in 2005.

Along with the growing level of investment, the size of financings for clean tech companies is growing. According to the VentureOne-Ernst & Young report, the median size of a clean tech financing round in 2006 was $6 million, almost double the size of the previous year. For US headquartered companies, the 2006 median round size was $7.5 million. Significantly, the latter figure was slightly higher than the overall median for all types of US venture capital financings, indicating a high level of confidence in the industry’s future.

According to the published reports, the San Francisco Bay Area accounted for the largest chunk of investments, with more than 20% of the US total. But Austin, TX, Boston, Denver and North Carolina’s Research Triangle area also garnered substantial shares. There are two key questions for industrial property owners.

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