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Show me the Money: the Debate Continues about Financing Urban Innovation

March 2, 2012 - 0 Comments

How exactly are companies and cities going to successfully finance dramatic upgrades of urban connectivity? When will the financial engineers develop the tools which, when used, result in smarter and more prosperous communities where efficiencies are realized; where multiple urban systems are integrated; and where the return on investment shows up in improved local economies?

On Feb 1st this blogger took a first look at that conundrum, as part of a panel at The Cities Summit,  —convened by The City of Vancouver. A few weeks later, I joined  another group of leaders assembled at the second annual Conference  on Sustainable Real Estate of NYU Schack Institute’s Center for the Sustainable Built Environment, where  not surprisingly, the topic came up again, at the conference’s conclusion.

Firstly, some background will be useful. In attendance was one of NYU’s big stars, Professor Constantine E. Kontokosta, who directs the Center. He served as conference co-chair, along with Chuck Leitner of Greenprint Foundation and RREEF. Susan Leeds of the NYC Energy Efficiency Corporation and my colleague Relina Bulchandani, Global Lead, Connected Real Estate at Cisco’s Internet Business Solutions Group rounded out this group of experts.

Building on the success of their first conference last year,  – “Building the Smart City,” which included keynote addresses by Professor Ed Glaeser and Jonathan Rose, this year’s conference theme was “Energy Performance, Risk, and Real Estate Capital Markets: Searching for Common Metrics.”  The conference brought together leaders from the private, public, and academic sectors to “discuss the emerging debt and equity markets for commercial/multi-family building energy efficiency, the role of data and information technology in investment decision-making, and the need for common performance metrics that cross disciplinary and professional boundaries.”  It was a a tall order, but this one day conference allowed for some very deep diving by the hundreds who gathered in lower Manhattan.

Relina led a fascinating morning panel that focused on “Open Data and the Role of Information Technology, and I joined the  closing panel entitled, “Investment Performance and Energy Performance – Is There a Link?” My fellow panelists included Chuck Leitner as moderator; Jeff Brodsky, President of Related Management; Sukanya Paciorek, Vice President of Corporate Sustainability at Vornado Realty Trust; Theddi Wright Chappell, Senior Managing Director at Cushman & Wakefield; and Wendy Rowden, the Managing Director of the Investment Practice Group at the Jonathan Rose Companies.

All five of us on the panel made note of the deep impacts that technology is having on the real estate industry — and the fast-changing nature of the debate about sustainable buildings. It’s clear that the leading companies are ready to reassess the traditional risk equations and value equations, a fact which certainly bodes well for the future of cities.

The conference succeeded because it struck many as a perfect fit for this specific moment in time: showcasing where linkages connect up the big challenges.  These include  increasing energy efficiency, smartening buildings, and bringing intelligence to infrastructure— at the moment when new financing opportunities continue to emerge from the built environment.

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