'Green' Economy to Focus on Saving Money

For real estate owners, green buildings are vital. We will see tenants moving to green buildings, while conventional buildings will become increasingly unpopular and most likely experience above-average value declines.

What green real estate investments offer the best opportunities?

Forget the construction of new green buildings for now.

Today, the greatest investment opportunities are the purchase and greening of existing buildings through green retrofits, which enable owners to upgrade occupied buildings with cost-effective green technology while only moderately affecting the tenants. Today's economic shakeout will put some very good Class A properties, and some well-located Class B and C properties, on the market at advantageous prices that make them ideal for cost-effective green retrofits.

What about green housing? Prior to the mortgage crisis, green homes were starting to take off in the U.S. Are they stalled or dead for now?

Green homes offer great opportunities for owners and tenants to save money in tough economic times and to do their bit for the environment. Again, green buildings offer lower energy and water costs.

Having said that, I do not think a home's "greenness" is the No. 1 item on many homeowners' minds. They are struggling with bad mortgages or they are afraid of losing their jobs. So it's going to take a little while for green homes to become a key issue in housing markets.

Add the widespread notion that only rich people can afford green homes, and you can see why green homes face difficulty in gaining traction in today's difficult economy.

How will the Obama administration's proposed economic stimulus package affect green commercial real estate, products and technologies?

Even before Obama takes office, the $700 billion bailout package will support green real estate, products and technologies with extensions of the tax credit for solar energy properties, the production tax credits for wind energy, geothermal and other renewable energy resources, and the tax deduction for energy-efficient commercial buildings.