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NEW YORK CITY-The greening of real estate may be the wave of the future, but is the business case for it still viable in the tough business climate of 2009? “Absolutely yes,” said GreenOrder founder Andrew Shapiro at a panel discussion Wednesday evening. “The world has not changed.”

Shapiro explained that the conditions giving rise to the green real estate movement–concerns about climate change, fluctuating energy prices and greater attention to corporate accountability in the post-Enron world–have not disappeared amid the recession. Moreover, sustainable practices can lead to dramatic savings; Shapiro cited the example of his client General Electric, which has saved $110 million in energy costs since greening its factories.

His comments were made in the context of a panel on the market for green leases, one of three discussions that comprised the “Green Building: New Requirements and Incentives” event sponsored by law firm Schulte Roth & Zabel LLP. Ken Rapp, CB Richard Ellis vice chairman, said that market is being driven in part by the younger generation, but added that he sees a split between tenants who make green a top-of-mind priority and those that are mainly concerned with how much the space is going for.

“It’s been a learning curve for everyone,” said Rapp. Other panelists made it clear that the learning process involves everyone from tenants to landlords to contractors. One developer that got its green education early on was the Durst Organization, which built 4 Times Square as its first green office building in the 1990s.

“When we planned 4 Times Square, we knew we wanted to do it in an environmentally responsible manner,” said panelist Alex Durst, assistant VP at the Durst Organization. “At the time, we didn’t know what that was.” This year, the developer is completing the Bank of America Tower at 1 Bryant Park, slated to be the first LEED Platinum office building, and is retrofitting some of its existing properties.

Douglas Durst, co-president of the Durst Organization, was a key figure in the retreats and brainstorming sessions that culminated in 4 Times Square. Given that know-how of green building practices is still being acquired, sometimes on a project-by-project basis, he said the most useful step New York State could take in promoting sustainable real estate would be to establish a depository of information on the subject. “It could be easily done and would be extremely helpful.”

Nearly 15 years separate 4 Times Square and 1 Bryant Park, and green building has evolved in that time. Asked whether older eco-friendly projects are in danger of becoming obsolete, Douglas Durst responded that it is a concern but “that’s true with any technology.” A participant from a previous panel, JPMorgan Asset Management’s Douglas Lawrence, piped in with a solution: technology updates.

Besides, owners with green portfolios are already ahead of the game, Lawrence said. “I don’t care if the technology gets more efficient,” he said. Green buildings “are already going to be the most efficient in the room.” Refuting another qualm sometimes raised about eco-friendly buildings–that their competitive edge will be dulled when they become commonplace–Lawrence asserted that the commoditization of green through legislative mandates is 25 years off.

During a panel on laws and investment opportunities, Lawrence, the portfolio manager of the Urban Renaissance Property Fund at JPMorgan, noted that the real estate sector will be the “epicenter” of the Obama administration’s environmental policy. At the state and local level, green real estate is being encouraged through a series of carrots and sticks, said Lawrence P. Schnapf, partner in Schulte Roth’s environmental group. The carrots take the form of tax breaks and other incentives; the sticks come in the form of laws which mandate energy efficiency and other sustainable practices.

As yet, the Bloomberg administration’s PlaNYC, the sustainability program announced by Mayor Michael Bloomberg on Earth Day in 2007, hasn’t been codified into actual laws. However, that’s changing, said Nancy Anderson, founder of the Sallan Foundation. The revamping of the city’s building code is one example, as is the fact that the code will now be updated every three years rather than once in four decades, as was the case before PlanNYC.

Eventually, as laws mandating eco-friendly real estate becomes more commonplace, lawmakers will take away the carrots from owners and developers, Lawrence warned. “So the first movers are the best movers.”

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