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The best deal for investors, communities and the planet.

Green Finance for Commercial Real Estate

Green Finance for Commercial Real Estate

Stay ahead of the curve with new tools and underwriting standards.

Boost your ROI on capital investments.

Stay ahead of the curve with new tools and underwriting standards.

Boost your ROI on capital investments.

29 February 2009 Green Finance Presentation

Where we’re headed today…

Analytical Tools & Standards

The Green Capital System

LCCA

Simple PaybackNPVIRR

UnderwritingStandards

RPI

Underwriting Factors

Green Equity

Economic,Environmental & Social Outcomes

Green Debt (?)

Financial Incentives

Green Leases

39 February 2009 Green Finance Presentation

Real Estate FinanceReal Estate Financeused to seem so simple…used to seem so simple…

49 February 2009 Green Finance Presentation

CHILLER

Cap That!True Story

– 265,000 sf office– $200,000 from PG&E – $0.50 /SF savings p.a.– $1.3 mm over ten years– $2.2m value increase

59 February 2009 Green Finance Presentation

About Galley Eco Capital

Transaction Size

• Real Estate $20mm+ / Solar & Wind = 1MW+

Objective

• Connect full range of financial products / benefits for green projects. Business intelligence, structuring, financial modeling and due diligence expertise.

Sectors • Sustainable Real Estate & Renewable Energy

Location • Nationwide

Structures• Entity-level Investment Programs, Hybrid

Debt/Equity Structures, Energy-Savings Financing Structures.

Current Pipeline • $200mm

69 February 2009 Green Finance Presentation

Example: Shiloh Sustainable Village

• Sponsored by North Street Partners: Town of Windsor, Sonoma County.

• Net Zero Energy + Carbon Neutral Urban infill mixed use. 1. Passive design. 2. Solar energy. 3. Carbon credits.

• LEED-ND & LEED CS development. $62mm project value.

• Competitive Occupancy Costs = Competitive Investment: 1. Zero electricity for residential tenants; 10% lower electricity costs

for retail. 2. Designed in Hedge against Energy & Water Price Risk.

79 February 2009 Green Finance Presentation

2030 Challenge

Every year we:

• Tear down ~ 1.75 Bn sf.

• Renovate ~ 5 Bn sf.

• Build new ~ 5 Bn sf.

US building stock = 300 Bn sf.

89 February 2009 Green Finance Presentation

2030 Challenge

By 2035, nearly 75% of the built environment will be new or renovated.

www.2030challenge.com

The next 30 years offers a historic opportunity for:

communities to avoid dangerous climate change.

•architecture •building •AND FINANCE

99 February 2009 Green Finance Presentation

A system of public and private market financial mechanisms that promote sustainable real

estate.

Rewards Resource

Value

Integrative

Intentional

Green Finance:

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Tools

119 February 2009 Green Finance Presentation

No more “Compartment of Finance”

Think: ‘Sustainability Operating

System’ An interrelated system of processes that use

sustainability to achieve economic, environmental and social outcomes.

* Managing your cost of capital is a key part of this system.

129 February 2009 Green Finance Presentation

Green Real Estate Finance & Investment Experts

Lisa Michelle Galley, Managing PrincipalGalley Eco Capital, LLC71 Stevenson Street, Suite 400San Francisco, CA 94105(415) 655-6668lisa@galleyecocapital.comwww.galleyecocapital.com

• Project/Portfolio Consulting• Incentives/Cost Segregation

• Green Finance Education• Recommended Reading