Aug. 20 - The "Green" real estate investment market not only sizeable but is a potential profit boom for financial institutions, according to a four-year comprehensive investment study conducted by the Capital Markets Partnership (CMP). Green real estate investment can also help reinvigorate lackluster securities markets and potentially stave off a refinancing commercial real estate credit crunch.

Those are just some of the findings of the Capital Markets Briefing Paper: Business Case for Commercializing Sustainable Investment, which documents four years of Wall Street standard due diligence with investment banks, investors, and rating agencies. The results were released this week during CMP's Sustainable Investment Initiative meeting held at the New York Stock Exchange.

CMP is a coalition of more than 70 financial institutions, governments, countries and investors implementing green building investment underwriting standards and sustainable mortgage-backed securities.

The Capital Markets Briefing Paper includes the results of an Investor Survey initiated with Standard & Poors covering over $3.3 trillion in assets and finds that investors view green buildings, green power and certified sustainable manufactured products, as more profitable, less risky, and the preferred investment opportunity.

"This effort tackles the critical and immediate priorities of stimulating the global economy while promoting energy efficiency, renewable energy, and energy security," said Mike Italiano, CMP's CEO. Italiano is also Founder of the U.S. Green Building Council.

"We are also promoting product innovations in the capital markets, poviding higher-quality collateral to the real estate finance sector and securities markets, thereby facilitating new securitization opportunities, while preventing dangerous climate change," Italiano added.

The green building market is growing far more rapidly than the U.S. and global economies. Despite this growth, occupant demand continues to outstrip available supply. Even more troubling, a global CoreNet Global/Jones Lang LaSalle 2007 study indicate that 84% of corporate occupants believe that the supply of green buildings is non-existent, minimal, limited or patchy in the markets in which they operate.

However, a market evaluation by participating investment banks, finds there are an estimated 800,000 green homes and 100,000 green commercial buildings available for potential green-building securities pools.

Earlier this year, The Capital Markets Briefing Paper underwent a peer review study initiated by policymakers, business leaders, and financial institutions including the Hon. Gavin Newsom, Mayor, City & County of San Francisco, Chairman, Capital Markets Partnership representing the US Conference of Mayors; officials from Jones Lang LaSalle, Citigroup, JPMorgan Chase, and Wells Fargo Wachovia; Carl Pope, Sierra Club Executive Director, Corey Brinkema, President, Forest Stewardship Council, and Larry Schweiger, President & CEO, National Wildlife Federation.

The mission of the Sustainable Investment Initiative is to launch a suite of green building and other sustainable finance and manufacturing products. Several of these products were launched or introduced during the meeting including: Community Reinvestment Fund's USA Green Building Tax Credits, e3bank's Cheaper Cost of Capital for Green Buildings, and the Renewal2 Green Building Investment Fund.

CMP is a coalition of more than 70 financial institutions, governments, countries and investors implementing green building investment underwriting standards and sustainable greenbuilding securities. CMP, The Institute for Market Transformation to Sustainability and coalition partners are not responsible for the independent actions, associations, and policies of member institutions.

MTS

MTS

Capital Markets Partnership

More from MTS