Exit Strategy
"They're thinking about an exit strategy," he said in a telephone interview from his office in Del Mar, California. "They see a premium."
Research demonstrating the financial benefits of LEED construction is limited because the program is recent and there's been little information on whether completed buildings met their design goals, said Matthew Kwatinetz, managing partner at QBL Partners, a New York-based consulting firm.
"We know that certain green features are the direct cause of economic gains that show up in higher asset prices," he said in an e-mail. "If the answer were wholly non-controversial -- that is, market-accepted -- there would be a whole lot more green buildings."
Gerding Edlen closed its Green Cities Fund I to investors on Dec. 31 after raising $183 million. It's preparing to start a second fund as soon as April.
'You're From Mars'
"When we were launching our first fund, people would look at you like you're from Mars," Edlen, 59, said during an interview on the rooftop of the Indigo, with a view of Portland's skyline and rain-soaked hills. "Today we know there's a lot of demand."
The fund has a targeted 16 percent internal rate of return and is "performing above that," said Molly Bordonaro, Gerding Edlen's senior vice president.
Gerding Edlen is raising money less than two years after it transferred troubled condo projects in Portland, Seattle and Los Angeles to lenders at a loss to its backers of more than $200 million, according to property records and interviews with investors.
Robert Scanlan, chairman of ScanlanKemperBard Cos., a Portland-based real estate investment firm, said he would recommend Gerding Edlen to other investors, even after he lost $54 million with them on condo projects in Portland, Seattle and Los Angeles that were returned to lenders in the wake of the 2008 real estate crash.