Real Estate Investment Fund

GREEN CANOPY CREATES A COMPANY TO HELP BUILD RESILIENT AND INCLUSIVE COMMUNITIES

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SEATTLE, Washington & PORTLAND, Oregon (October 4, 2017) – Green Canopy, Inc., a proven urban infill deep green homebuilder, announced the launch of its newest affiliate company, Cedar.

“Meeting the challenges of global warming and the housing crisis in our high growth cities requires us to develop disruptive, integrated, and inclusive solutions. We are proud to offer a for-profit model for building resilient, inclusive and sustainable net-zero energy micro-communities without reliance on direct government subsidies” says Aaron Fairchild, CEO of Green Canopy.

The Company will acquire, develop, manage and market third-party certified green built, net-zero energy residential homes over the course of a 7-to-10-year period in Seattle, WA and Portland, OR. A minimum of 25% of the homes in every project site will be reserved as affordable rentals to households earning 80% of area median income (AMI) over the life of the Company. A final disposition process will result in selling a minimum of 25% of the remaining portfolio into community land trusts, or similar model, to be held permanently affordable to households earning 80% of area median income.

“Ecotrust is delighted to be a shareholder in Green Canopy, Inc. The Team has been terrific and we look forward to seeing where they take walkable residential infill development in the years to come. Green building, along with regenerative farming and forestry, are promising potential ‘drawdown’ technologies that pull CO2 out of the atmosphere and help reverse the devastating trends of the Anthropocene,” says Spencer Beebe, Founder & Executive Chair of Ecotrust.

Green Canopy's Cedar is poised to act on this opportunity. The urban infill home-building market is a highly fragmented marketplace with hundreds of small, independent homebuilders in both the Seattle and Portland markets. The February 2017 McKinsey Global Institute report, Reinventing Construction: A Route to Higher Productivity, found that “$10 trillion (is) spent on construction-related goods and services every year. But the industry has an intractable productivity problem and ... an opportunity to boost value added by $1.6 trillion.” “Fragmented markets and inefficiency go hand in hand. Our team at Green Canopy has long been aware of these inefficiencies and has spent considerable amount of time developing the processes and systems to contain costs and scale,” says Aaron Fairchild, CEO of Green Canopy. He further adds, “This ability allows us to lean in further to our mission and bring to the market net-zero energy homes alongside affordable home ownership. As a for-profit company, this puts us in a unique position to not only drawdown carbon, but to also lift up our communities.”

Samantha Lamb, of Lake and Company Real Estate sees the company as an innovative leader.  “Green Canopy is indisputably one of the leaders in the Green Home movement in Seattle and beyond. It is founded by passionate people who truly want to make a difference in the world. They don't just go for minimal standards in Green Construction; they are actively educating the market and realtors about the benefits of building and buying Green,” says Lamb. As evidence of this, Green Canopy will amplify Cedar’s impact through an 18-member stakeholder group, calling it the Impact Collaborative. The Collaborative will bring greater transparency to Cedar – its processes, best practices and outcomes – then conduct research and broadly promote their findings and advocate for new and better approaches.  


About Green Canopy
Green Canopy, Inc. runs a homebuilder, Green Canopy Homes, in Seattle and Portland whose mission is to inspire resource efficiency in residential markets. Green Canopy Homes began building in 2009 and has successfully sold over 125 third-party certified, green homes with over $80 million in gross revenues. Green Canopy Homes has highly developed home designs, project management processes, checklists, and systems of cost containment specific to the challenges and needs of building attractive, resource-efficient, micro-communities in walkable, urban places.
 
Contact: 
Aaron Fairchild, CEO
206.792.7281
aaron@greencanopy.com
 
Andy Wolverton, CFO
206.792.7287
andy@greencanopy.com

Mission Aligned and Market Driven

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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:
Andy Wolverton
andy@greencanopy.com
O) 206.792.7283

Impact Alignment: Where Impact Product Meets Impact Buyers

Contributed by: Aaron Fairchild, CEO of Green Canopy, Inc.

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.

Moving Past Infill Ill Will

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By Aaron Fairchild, CEO/Chairman of Green Canopy Inc.

The outcry against residential in-fill has reached a fevered pitch in Seattle. Neighbors are yelling at homebuilders, each other, the city, and anyone who will listen. The themes are relatively consistent; opposition to modern homes, bigger homes, added density, or the fact that projects are unaffordable to existing residents. Builders, on the other hand, are simply trying to build what the market demands – and that may well conflict. But, is the fevered pitch, and ill will around new in-fill developments in the Seattle area necessary, or is there a way to work together?

As someone on the front lines of the neighborhood hostilities trying to do business in a new way, I think there is.  By engaging with (and listening to) neighbors and being transparent about planning and decision-making beforehand, infill housing can become a welcome and community-forwarding endeavor. 

Having heard the angry outcry, and with a focus on continuing to build a human values-based business that contributes to communities, here are a few ideas for how this could be done: 

  • Listen, really listen, first. Changes within a neighborhood can be emotional for many. When you recognize that going in, even hearing concerns starts to build a trust pattern. While plans are still conceptual, hold a community meeting to receive input on the direction of your design.

  • Engage along the way. Especially with topics like sidewalk closures, site work, paint colors, etc. (We use Tumblr quite a bit on this front) Updating the community using a community blog demonstrates awareness that the developer is entering into an established norm of how the neighborhood functions. 

  • Acknowledge feedback and make Changes. When neighbors really see a result of their comments, whether as acknowledgement or in changes to the plan, trust is solidified, paving the way for the best possible relationship with the community throughout the construction process, and helping the new homeowner receive a much warmer welcome.


How is this good business? Engaging the community while building in close quarters with neighbors helps minimize angry calls and letters to the city, intense verbal discussions with subcontractors, and creates a much better work environment for everyone. By approaching our own projects in this manner, we’ve had neighbors bring us warm coffee, cookies, and offer to help. Our homebuyers are a welcome addition to the neighborhood versus being seen with skepticism and mistrust by association. All of this work helps create positive association with our company name and ultimately helps sell our homes.

In this day and age of transparency, builders really can’t “bulldoze” their way into a neighborhood.  If neighbors and builders alike can remain open to each other, listen and engage, we should all be able to learn together how to effectively rebuild our aging infrastructure, honor our past and lay the groundwork for a thriving future in Seattle.

This piece was written in response to a thoughtful article from Seattle Weekly entitled "Boomtown Brawls" by Nina Shapiro. 

Last Courtyard in Paradise

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Contributed by Krystal Meiners, Marketing Manager for Green Canopy, Inc.

View this project on Houzz.  It is 38 degrees and sunny in Seattle – a forecast that is quite unusual for the Pacific Northwest. Despite the chill, I step into a home that is warm, cozy and filled with light. I love it. I know I say this about all of our Green Canopy Homes – but this one is truly a green dream home. Miriam is amazing.

Today I am meeting Ryan onsite. He is one of our most talented PM’s and is churning this home out nearly one month ahead of schedule. Impressive, Ryan ;)

Before we get started – it almost goes without saying - the most special thing about Miriam, is the interior courtyard.  We both enthusiastically agree. It is an amazing and quiet meditative space in the very heart of the home. The entire project seems to be planned around this space. The path from the front door to the courtyard makes me think of a conch shell – with a circuitous flow from the public entry and entertainment areas, spiraling inward to the heart of the home.



Ryan gives me a tour of the home and we talk about the project and the components that help us achieve that Green Canopy VIBE. Value –Innovation – Beauty – Efficiency. Every Green Canopy Home grows from these 4 roots.

Value

  • Neighborhood – This home is walking distance (Walkscore 80) to both Seattle Children’s and U-Village as well as some cute local shops on 55th.

  • Energy Savings - With the power of an 18kW Heat Pump unit blowing overhead – a 32 degree day in Seattle is unnoticeable indoors. AND with a test-out score of 15,000kWh/year this home is definitely going to be a money-saver!

Beauty

  • We already said it once – but here it is again. INDOOR COURTYARDS ROCK YOUR SOCKS OFF! Literally! We joked that you could enjoy a cup of coffee in the morning in your birthday suit, but no one could see you... basically you’re inside, but you are really outside! Fun.

  • Highest Ceilings Ever. Move over downtown lofts and luxury condos… we have 20’ ceilings in this home too.

  • That’s quite the fine façade. A mix of materials, color and the right proportions give this modern home a humanscale touch. Modern architecture often gets a lot of slack for being too “monumental” but Miriam not only has a dynamic façade but the massing is similar to other homes on the block. It makes for an eclectic but appropriately scaled home on the street that reflects similar massing and structures without copy-catting or invoking the “neo-crapsman”  builder style

Innovation

  • New Stair Spec! Its always exciting when our PM’s are able to create win’s for the company that can be repeated over and over again throughout our homes. This spec combines precast concrete treads with reclaimed beams from another Green Canopy Home. It’s a bit more expensive but the installation is faster. WIN

  • Re-envisioning a courtyard - Green Canopy was fortunate to salvage this homes original footprint – which is how we managed to get the inner courtyard in the first place! The original floor plan was a U-Shape with a courtyard that opened onto a full yard – we closed the loop, so to speak, and enclosed that fantastic space.

  • New bamboo closet systems! Pretty and renewable!



Energy Efficiency

  • The original home on this lot tested in at 22,000kWh and tested out at 15kWh. While that is an impressive transformation – Ryan, who is also our HVAC guru, has created a personal goal to have his homes test out at 14,000kWh. Go Ryan!

  • All of homes have the bells and whistles of the Energy Efficiency Seal - the 4th root in our 4 Roots. It also has some additional features that are pretty cool: Convection cook-top range (a product that seemingly works via magic and was created by wizards); As well as Bottom-loading freezer. Why is this efficient? The short answer: Cold air sinks – when you open your freezer air escapes more easily if it is up top. Period. We are just keeping the air where it wants to be.

Miriam is an all-around classy and unique home – that was recently snatched up in our new Presale program.

Happy Holidays!

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Buckle Up

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Contributed by Aaron Fairchild:

Buckle up, there will be turbulence
“Plunge in Home Sales Stokes Economy Fears” WSJ article said the following about the national real-estate market on Wednesday, August 25, 2010:

  • “Sales of previously owned homes fell 27.2% in July. . . Lowest level since (NAR) started tally in 1999.”

  • “Economists say sales drop…means another drop in housing prices is on horizon.”

  • “High unemployment and meager wage growth and falling home equity means depressed consumer spending.”

In the same WSJ issue the editorial page reported that national homebuilders’ stocks rallied on Wednesday as the news of the decline in home buying was announced.  Apparently investors believe the time for getting into the real estate market is now, when home prices and employment rates are at or near their bottom.

Is there really a “National Real-Estate Market”?
According to the Bureau of Labor and Statistics the Seattle area unemployment rate in June was 8.6% and holding steady.  Employment in our region is anchored by desirable jobs in growing sectors of the economy.  We live in a beautiful part of the world with plenty of water, mountains and forests.  People continue to move here as the map published by Forbes (June, 2010) illustrates below.  Red lines indicate a net migration away from the city, black indicates net movement into the city.

The last time we saw more people leaving than coming to our state was in 1982 and demographers expect growth in this region to continue as unemployment, poor economies, water shortages, and desertification continue to push people out of other regions of the country.  Additionally, homes in Seattle are more affordable today than they were during the period of our local depression, where 1 in 8 people were unemployed, from 1969 to 1973.

How does all this affect G2B?
Less Competition at Acquisition
G2B continues to believe that in the near to mid-term, property values will remain flat or rise only with the rate of inflation.  This will shrink margins for investors who look to buy and hold.   The uncertainty in our real estate market will continue to drive nervous investors and speculators to the sideline leaving less competition for acquisitions of fixer properties in neighborhoods where G2B thrives.


More Competition at Sale
This situation continues to play to G2B’s strength.  G2B differentiates its homes in the direction the market is trending.  G2B designs comfort, quality, energy efficiency, and green into existing homes in neighborhoods with a strong sense of community.  G2B’s differentiating design appeals to the values that homebuyers are demanding.  The current market conditions only enhance G2B’s edge when competing for precious homebuyers.


Knowing the Market with Deep Experience
G2B knows how to accurately value homes at acquisition and sale.  Having compared and evaluated over 15,000 homes in Seattle’s good and bad times gives G2B the strategic edge needed to exploit opportunity in uncertain markets and create additional value.

We are certainly living in interesting economic times.  Turbulence and uncertainty provides opportunity for smart moves and strong profits.  We are excited about this market and extremely well positioned to thrive!

For Profit and Energy Efficiency

rocks

Post contributed by Aaron Fairchild:

I was recently invited by the Federal Reserve Bank of St. Louis to present in Louisville, Kentucky at a symposium on “Green” Finance Investing in Sustainable, Energy Efficient Developments. I was very honored to participate and to share what we are working on at G2B Ventures. You can download a PDF of the agenda here. There were a lot of other very cool programs presented, like The Babylon Project out of Babylon New York, and Enterprise’s Green Communities program.

I headed to Louisville with a healthy dose of humility, expecting to be an outlier from the speaker’s podium, and left there with the impression that I was indeed an outlier, but only because I was one of the only speakers talking about for-profit approaches to improving our existing residential building stock. In fact, G2B was the only group represented on stage with a for-profit solution to improving the energy efficiency of existing single family housing. As a result, I had a great time sharing what we were working on and enjoyed several questions and discussions about how to implement a program similar to ours in Louisville and beyond.

I also left Louisville with a new outlook on the city. They are making big strides toward energy efficiency, and Kentucky is working on retrofitting 10,000 homes with their Clean Energy Corps! I had the opportunity to visit a very progressive and fun hotel / museum, 21C, and would recommend the city to anyone interested in visiting. Thanks for the hospitality Louisville and thanks to the team at the Federal Reserve Bank of St. Louis.

Too Early, Too Late or Just Right?

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Post contributed by Aaron Fairchild:

The same day that I received an email from a friend saying that he thought G2B Ventures just might be too early in the space and ahead of the market, I read an article in the Harvard Business Review about how, “smart companies now treat sustainability as innovation’s new frontier." There were a few articles in the September 2009 issue relating to green and sustainability. The lead article says that companies won’t grow unless they throw themselves entirely at green initiatives. I am in the thick of establishing the Efficient Real Estate Investment Fund, so naturally I tend to side with HBR over my thoughtful friend. Frankly, it is just amazing to observe how far we have come in the green and sustainability business world. We couldn’t have done what we are attempting to do in green real estate 5 years ago, but today it just makes sense.

When Harvard is saying the business world MUST go green to grow, you've got to think G2B is in the right space and at the right time, not just because we are doing good for the environment and society, but because we can make money at the same time.