Impact investing in green home development aims for profitability on a triple bottom line
FOR IMMEDIATE RELEASE:
SEATTLE, Washington (December 22, 2015) – Green Canopy is excited to announce that we have eclipsed a major milestone with our second Impact Debt Fund. The Alder Fund is a Real Estate Impact Investment Fund that is managed by Green Canopy and designed to lend on the development of certified green and guaranteed efficient homes. It has now issued its last loan and will begin winding down – issuing distributions as loans repay over the next 6-9 months.
With the help of the Fund and all of its participants, Green Canopy completed 50 high efficiency homes across Seattle, reaping a total energy savings of 532,000 kWh per year. “We have mitigated over a million pounds of carbon in the last two years by building Green Canopy homes. That’s the equivalent of planting nearly 30,000 trees every year,” says Sam Lai, the CMO of Green Canopy. “These are metrics that our investors look at when they consider putting their capital to work for a cause. Of course it is also about returns, but not just so.”
The Alder Fund launched in October of 2013 with $7.7MM. Of the 50 Green Canopy homes that were built, nearly 25% of them were sold at price points below $450k in an effort to attract middle and lower income buyers in the Seattle market. These pricing targets were set by Washington State Housing Finance Commission, who partnered on several projects with Green Canopy with the hopes of providing green and energy efficient homes to buyers who also qualify for the Commission’s down payment assistance programs.
“This Fund, which eventually lent over $29MM for the completion of 50 homes, has been especially prosperous, and is an indicator of what mission aligned and market driven capital can accomplish,” said Andy Wolverton, the Fund’s manager and CFO of Green Canopy Homes. “The Alder Fund’s success is certainly reflected in our triple bottom line – and brings more than just monetary returns to our investors.”
The return profile for the Alder Fund is 9-12% annualized - and so far it is on target to achieve that goal. Over 50% of the investors have reinvested in the Birch Fund, Green Canopy’s third Impact Investment Fund which began raising capital this summer. The Birch Fund is targeting a total raise of $20MM and hopes to increase the number of affordable homes for sale here in Seattle and in Portland.
FOR MORE INFORMATION PLEASE CONTACT:
What impact could we have if we were all just a bunch of tree huggers united under a green canopy? Our logo is definitely symbolic of the work that we are doing to change the course of climate change - and certainly everyone knows that we have sang our share of kumbaya - but it's the fast, hard data that delivers our projects and helps us work toward improvement at Green Canopy.
Decision making and benchmarking frameworks are integral to Green Canopy’s operations. Our acquisitions team uses a data driven framework and metrics to identify and purchase attractive development properties. Our project managers use a framework for guiding construction related decisions from start to finish. The reporting outputs are used to inform and manage future acquisitions and projects.
These carefully crafted systems support us in driving toward consistent execution and continuous improvements. We learn from the successes and failures of our decisions by establishing baseline metrics and measuring and reporting against them. This ultimately makes Green Canopy a better homebuilder. And importantly, creates a stronger and more resilient company, reduces risk for our debt fund members and builds a more valuable brand for shareholders.
Investors face similar challenges, especially those pursuing positive social and environmental impacts alongside financial performance. Without a guiding framework, impact investors are left to untangle a confusing mix of information and options. An impact framework can be a transformative tool enabling investors to move beyond intuitive guesswork toward more systematic and objective decision making.
We hope you will join us in attending an event, Impact Investing with Purpose, being hosted by The CAPROCK Group and SNW Asset Management on Tuesday, October 20th, 6 to 8 PM at Seattle Impact HUB. Green Canopy board member Kyle Mylius will moderate a panel exploring the evolution and use of impact investing frameworks and metrics. Panelist Luni Libes, a familiar face to many of you from Fledge and Pinchot University, will offer insights into The Pinchot Impact Index, the subject of Luni’s recently published book. The event will close with a preview of CAPROCK’s iPAR impact investment framework and evaluation platform.
If you plan to attend you are asked to RSVP here.
Did you miss this year's Built Green Conference and Green Genius Awards? Below is a fun synopsis of the event that was published in the October issue of the NWREporter. We were so excited to participate this year - and thrilled to honor the agents and builders who have made Green Building a central part of their business - and who are working to transform the market. Next year should be even better!
Click here for images from the event on the Kate Baldwin Gallery
re-blogged from the October issue of NWREporter
Which creative approaches can we employ to generate measureable results for the environment and our communities?
This question has many correct answers, and around 200 members of the green building community - builders, realtors, suppliers, consultants, and policy makers - gathered at the Built Green Conference on September 9 to pose their own thoughts and learn from others. The day kicked off with an engaging keynote and interview with Joe Whitworth, and then conference-goers filtered into smaller sessions that covered a gamut of topics - from Net Zero to Marketing to Millennials. In between, folks snacked, socialized, and networked in the midst of sponsor booths, collecting the usual goodies and stamping their passports for prizes. The day ended with a lively awards ceremony and reception - complete with a dozen blushing winners and a band.
The opening remarks and keynote set the conference off in a thought-provoking manner. Joe Whitworth explained the concept of "Quantified Conservation," a process that employs best practices to achieve environmental gains by having good situational awareness and establishing firm outcomes. His method leverages data and analytics to achieve measurable gain.
During the live interview, Joe was asked about the feasibility of employing this approach, how the market and environmental health both are intertwined and can be in opposition to each other, and how to spur needed policy chances. The questions were tough, but the answers were thoughtful, with Joe providing excellent explanations of his ideas and concrete examples of where they have been successfully employed. This discussion lead audience members to pose more questions of their own and to engage Joe in conversation later in the day.
The crowd dispersed for the following breakout sessions with this stimulating discussion on their minds, and later Joe signed books and answered questions one-on-one while attendees ate lunch and poured over their agendas to choose afternoon sessions.
There were four session tracks on the schedule: Building, Policy, Measuring Success, and Creative Approaches. Attendees visited the sessions that interested them the most and were also able to branch out and learn more about a topic they were less familiar with. Presentations covered green building on all scales - from the science of low emitting materials to the methodology of building sustainable communities like Capitol Hill's EcoDistrict. There were hard facts on making net zero energy buildings pencil for builders and soft skills for marketing to millennials. We even got an update on the energy outcomes of zHome, a Built Green model project in Issaquah's Highlands. It was fascinating to look at real performance data and see zHome functioning as designed.
There were also two case studies that attracted huge interest - Seattle's very first Emerald Star project from Dwell Development and a project from Batt+Lear and VELOCIPEDE architects that combined everything (even the kitchen sink!) into a Built Green, Passive House, Living Building, Feng Shui masterpiece of sustainability and experiential design.
The day was lively and long, full of good information and even better discussion. It ended on a high note with the Built Green Hammer and Pioneer Awards and the third annual Green Genius Awards. Developers, builders, and advocates for Built Green were rewarded for their amazing efforts and shook hands with Built Green's newest manager, Leah Missik, and coordinator, Ellen Cole. The Green Genius Awards highlighted the real estate brokers and brokerages that are actively working to promote sustainable development and the transfer of knowledge from the builder to the buyer. Award winners from Built Green and Green Genius include Dwell Development, Tom Balderston, Green Canopy Homes, Polygon Northwest Company, Ichijo USA, gProjects, PHC Construction, Triad Development, SRM Development, Housing Hope, Jay Miller of Keller Williams, Allie Howard of Redfin, Re/Max Metro Realty and Redfin.
All of the winners as well as the conference attendees, sponsors, and students who joined in at #BuiltGreen15 are working toward a more sustainable Pacific Northwest. The conference was able to showcase so many of the creative solutions and measurable results that impact our regional green building marketplace. It was such a great event - and next year is slated to be even better.
Have ideas for next year's conference? Want to learn more about the winning people and projects? Email the Program Manager of Built Green, Leah Missik with your questions and ideas. See you next year!
Written by: Leah Missik, Built Green Program Manager & Krystal Meiners, Director of Brand Experience at Green Canopy Homes
Ron Rubin hangs his license at RE/MAX Metro Realty in Seattle, but he is also the self-proclaimed “anti-real estate agent.”
Ron likes to keep things simple, staying focused on what’s most important and not worrying much about what other people think about him. He’s not one to get excited about awards – not because he doesn’t appreciate it – but because he doesn’t enjoy basking in the spotlight. Ron’s claim to fame in high school was having no claim to fame in school. He’s been fired from every job he ever had and that’s why he became a real estate agent. But with a stellar team, legendary systems and ~$16M in BuiltGreen certified new construction home sales last year – he is obviously no slouch. Ron is well known in Seattle for taking care of his builder clients with bulldog loyalty and finding deals through thick and thin.
One of the first times I met Ron he was wrestling his young toddler at a playground on Queen Anne and explaining that while it’s difficult to have babies without grandparents nearby, he expects nothing from them because it allows him to accept everything that comes from them with gratitude. Perhaps the culture of thankfulness comes in part from his experience narrowly escaping the tsunami that ravaged Thailand in the winter of 2005. He and his partner Rebecca stayed in Thailand to set up a guerilla relief fund called Waves of Mercy to provide “zero-red-tape” monetary aid to the people who needed help right away.
Ron’s MO is connecting resources to his people who need it - no need for a spotlight or a claim to fame.
Green Genius Listing Agent of the Year Finalist
Re/Max Metro Realty
Rose Bunao works alongside Jay Miller at Alchemy - a Keller Williams brokerage in downtown Seattle. We are thrilled to see their group represented on both the listing and the sales side of the Green Genius Awards! Not only are these agents up for the awards - but their brokerage is too!
Congrats to Rose and Jay!
Green Genius Selling Agent of the Year Finalist
Redfin Real Estate - Central Seattle
This year Redfin is topping the charts in the green home sales department. It is staggering to see the number of Redfin clients who are choosing green homes over other competitive properties. Perhaps it could be because Redfin is a next-generation company that represents an evolution in the way homes are bought and sold. It caters to a clientele that wants to be more involved in their home search and wants information at their fingertips, on their terms.
But the tech alone isn't enough to qualify a great real estate service. Redfin also employs dozens of experienced real estate agents like Allie Howard and Karlyn Goetz. Allie will be a third time finalist for the Green Genius awards this year and Karlyn is setting new personal records for green home sales. When you are working with advanced buyers who know what they want - your agents have to be just as knowledgeable and these agents certainly know what is important when it comes to energy efficiency, walkability and sustainable construction.
What Redfin has proven is that when you enhance the experience of the hunt, give your clients the right tools, and include a team of full-service real estate agents who are advocates for their customers rather than the typical salespeople - you empower your customers. When customers are empowered - they buy homes that align with their values, rather than something an agent sold them on. They buy green homes.
Redfin is a Green Genius Selling Office of the Year finalist and Allie and Karlyn are both Selling Agent finalists. They have certainly helped to transform the local market.
Green Genius Selling Agent of the Year Finalist
Redfin Real Estate - North Capitol Hill, Madrona and Madison Park
Green Genius Selling Agent of the Year Finalist
Redfin Real Estate - Central Seattle
Last week we posted about local Brokers who are making an impact in the Seattle real estate market. That list could never be complete without a hat's-off to Susan Stasik. Susan has won the Green Genius Awards for Listing Agent of the Year for the last two years - and we are so honored to know her, her work and the work that she does with one of Seattle's most notable builders - Dwell Development,
Dwell's mission is to create livable, walkable, sustainable communities. They are responsible for completeing over 40 Built Green properties in the mixed-income community of Rainier Vista near the light rail - as well as completing the first Emerald Star Built Green Spec Home in Seattle.
That's what the Green Genius Awards are all about - educating a community and transforming the market to consider sustainability when homes are bought and sold. That's Susan's job.
Green Genius Listing Agent of the Year Finalist
Windermere Real Estate - Madison Park
No one is questioning the success of the Seattle real estate market right now - but to folks like Susan Stasik, third time finalist for the Green Genius awards, its not about the quantity of home sales that really make her job worthwhile - its about the quality of the homes being sold; its about the people and the attitude toward better living; its about making an impact that affects more than just your pocketbook. Susan along with the rest of the Green Genius Finalists have more than one thing in common. First and foremost they are all stellar agents who know how to treat their clients, negotiate, and navigate the complex landscape of the Seattle housing market. They are all fierce agents with a passion for their jobs. But they do more than just navigate... they shape our market.
These Green Genius Agents have managed to really push the needle in real estate while simultaneously helping the Emerald City build a reputation for progressive, sustainable living. They are at the forefront of a national trend, and we couldn't be more excited to award their positive influence.
On September 9th - we will announce the winners of the Green Genius Awards at the Annual Built Green Conference in Seattle. Each winner will receive a cash prize. We are thrilled to award these brokers for all they have done this past year.
We asked each finalist a number of questions to get to know them before the Award Ceremony. Here is the first of seven posts. Let's see what Jay Miller has to say about green building!
JAY MILLER - Green Genius Listing Agent of the Year Finalist
Keller Williams Realty - Alchemy Real Estate Group
Excerpt from the Washington Women's Cookbook, 1909
1. Sleeping Bag, consisting of three bags - one inside the other.
(1) Waterproof shell, of khaki or rubber or parafined canvas or oiled silk
(2) Double wool blanket bag
(3) Comfort padded with wool bats, the comfort folded and sewed together as a bag.
2. Tramping suit:
(1) Bloomers or knickerbockers
(2) Short skit, knee length, discarded on the hard climbs
(3) Wool waist or jumper
(4) Sweater or heavy coat
3. Three pairs of cotton hose
4. Three pairs of boys' wool socks to wear as the second pair of hose to prevent chafing
5. Mountain boots to the knee with heavy soles, heavy enough for hob-nails and these must be placed in the soles before starting, using 3 1/2 eighths Hungarian nails in the instep as well as in the heels and soles
Say Hello to Cora! 2902 NE 53rd
It's always fun to research names for our homes. It is one of the identifying features of a Green Canopy Home - and most of our homes are named after women who have made history and who have helped us get to where we are today. I couldn't help but highlight one of our newest acquisitions. The moniker for this home certainly is a story worth being told! Our latest project is Cora - after Dr. Cora Smith Eaton.
Cora was one of Seattle’s leaders in women’s equality during the turn of the century. Additionally – she was the first female secretary of the Mountaineers Club and also the first woman to summit Mt. Olympus (not to mention she summited all 6 of Washington’s major mountains).
Cora was also a doctor of medicine and was the first woman doctor to practice in North Dakota before moving to Seattle. She was licensed in several states by the end of her career and ran a practice with her husband Dr. Robert A Eaton.
And my favorite anecdote – Cora also helped author the Washington Women’s Cook Book – a PR stunt for the Suffragettes to help get the message of women’s equality to the women who were still stuck in their kitchens – and to help sway men to support women’s right to vote by saying even the Suffragettes can still put a good meal on the table. Brilliant!
Cora's contribution to the Cook Book consisted of the list above (they have a section on packing food for a hiking trip) and a recipe for (drum roll please...) Tea. Yes - her meaningful, amazing contribution was Tea. The recipe is below - but in her heart of hearts, you can see where Cora's priorities were. She was an adventurer... blazing trails for all of us.
But clearly, none of us can live in the PNW without tea.
She is one bad ass mademoiselle. Welcome to Green Canopy.
A Recipe for Tea
In two quarts of fresh water, boiling hard, put a loose cheesecloth bag containing four heaping teaspoons of tea. Cover and let stand by the fire for five minutes, but do not boil. Then remove the bag of tea, as leaving it in will make the tea bitter. Or, if the bag is not convenient, pour the tea off the leaves after it has steeped for five minutes. -Cora Eaton
I have often cited Daniel Goleman to explain a consumer’s desire to make an impact with his or her invested dollar. In Ecological Intelligence, Goleman explains that consumers will always buy what they perceive to be a less toxic or more environmentally friendly product given price parity with a competing product. While the consumer may not be buying the perceived “better” product to make a positive impact in the world, they are likely buying it because they view the product healthier or better for their family.
This consumer behavior pattern offers a direct analogy for financial investors. It goes without saying that investors invest capital to generate a return. If an investor can invest in an opportunity that generates a similar risk-adjusted rate of return to competing investment opportunities yet the investment will also deliver outcomes that better align with their values, then the investor will likely choose to invest their capital in such a value-aligned opportunity.
Enter Green Canopy. Our mission is transformational; our company was deliberately created with the mission to inspire resource efficiency in residential markets. We have two impact product offerings for consumers to buy.
Our primary impact product is our homes. We build homes that are more environmentally sustainable than what is required by city code and have third party audits verifying our homes meet or exceed a local or national green building standard. In other words, a Green Canopy home is healthier for the planet, consumes less energy to operate (we guarantee that), and is simply a better home than the comparable code-built home. The kicker: we price our homes for sale on par with other homes on the market. We have to price our homes competitively with other homes because if we don’t, buyers would choose to acquire the less expensive yet comparably located and sized home. So buyers of our homes acquire a Green Canopy home at a competitive price that delivers outcomes that align with their needs and values.
Our second impact product is our real estate fund offerings. We currently manage two debt funds that generate competitive returns for investors. If it were not for these funds, we would not have enough debt financing to build more environmentally sustainable homes at our current scale. Investors in these funds buy membership units that are designed to generate competitive rates of return and deliver outcomes that align with their values.
I believe the United States has entered a relatively new era where the general market is looking for values-aligned solutions. I witness this daily in both of our product offerings. However, most consumers and investors remain price sensitive and will continue to be so. This is where many people believe the government and foundations can play a role. However, I don’t believe it is incumbent on the government or others to subsidize product offerings, or for that matter the market to simply accept the market-price mismatch.
Entrepreneurs innovate. The role of being an entrepreneur is to figure out how to bring new product to market in such a way that the market is willing to pay for it. Government incentives and infrastructure are helpful catalysts and support structures for market change. But the role of efficiently bringing new product to market is ultimately the role of entre- and intra-preneurs.
Additionally, foundations, the government and other mission-driven sources of capital can aid in providing lower cost of capital to kick-start product offerings and help stimulate demand (think of the Bullitt Center or the ZHome development). However, values alignment should not be seen as an impediment to bringing socially and environmentally impactful product offerings to market—it should be used as a competitive advantage. Sound business people focused on values-based product offerings will continue to innovate within the cost/price constraints of the market and ultimately bring more and more highly sought after product to meet consumer demand. Impact alignment and the balance between supply and demand are really just a matter of time and innovation.
Contributed by: Aaron Fairchild, CEO of Green Canopy, Inc.
The Green Canopy blog is written by our CEO and Culture Curator, Aaron Fairchild, as well as our staff and a few very special guests.