Would Invest Again
"A lot of money's going to be made with apartments," said Scanlan, whose firm has about $790 million worth of equity in 19.9 million square feet (1.85 million square meters) of commercial real estate. "We would invest with Gerding Edlen again."
So far, the Green Cities Fund I has financed seven mixed-use projects with 760 apartment units worth about $350 million in Seattle, San Francisco, Los Angeles and Boston, Bordonaro said.
The company plans to expand to New York and Washington, cities with low vacancy rates where landlords can charge higher rents to tenants who want to live near their jobs, Edlen said.
"We're trying to leave behind buildings that are much more responsible to their community," Edlen said. "Both from a design perspective as well as from the perspective of their environmental footprint."
LEED Platinum certification, the highest level, adds about 2 percent to construction costs while reducing operating expenses about 20 percent when lower energy or water use are accounted for, he said.
Covering Operating Costs
At the Indigo, a LEED Platinum building, rents average $2.40 to $2.45 a month per square foot, about 10 percent more than nearby apartments, Edlen said. It opened in October 2009, when the U.S. unemployment rate rose to 10 percent. Enough of its 273 units were leased within 10 months to cover operating and other costs, Edlen said.
Gerding Edlen markets to renters who like to shop at Whole Foods -- there's one across the street from the Indigo -- and want to commute by bicycle or light-rail train, he said. Across the Willamette River, tenants in a 50-unit Southeast Portland building, also developed by Gerding Edlen, leased only 27 of the garage's 30 parking spaces. The building's bicycle locker has run out of space and its biggest maintenance problem is wet bicycle tracks on the hallway carpet, Edlen said.
The efforts to go green, such as reusing untreated so- called gray water in toilets, may veer toward the earnestness lampooned in "Portlandia," the Independent Film Channel television show about the Pacific Northwest city's artsy, eco- conscious hipsters, said Portland Mayor Sam Adams.