Green Building Law Update would be remiss if it did not comment on the recent financial struggles and the impact these events will have on the green building industry. Simply put, here at GBLU, we anticipate scaled back green building efforts as developers struggle to obtain financing.
A recent article in Globe and Mail (Canada’s National Newspaper!) does a great job highlighting the recent financing struggle for project development. The article focuses on a major condominium project in Canada and the developer’s struggle to obtain financing:
Just eight months after frenzied buyers lined up for days to buy units of the $450-million luxury skyscraper to be erected at the corner of Yonge and Bloor Streets, the global credit and U.S. subprime mortgage crises tightened their grip . . . .
Mr. Gold moved a few months ago to seek out new financing partners. Conditions are getting tougher, but the location and quality of the project helped him sign on two European pension funds, Mr. Gold said.
While this developer was able to find new sources of financing, the article points out that “it’s the marginal projects that could get hurt.” Additionally, as financing becomes harder to come by, developers may be forced to “scale back their projects.” While Mr. Gold’s project apparently is not seeking LEED certification, if Mr. Gold had been forced to scale back the project due to a lack of financing, LEED certification may have been on the chopping block. Unfortunately, as developers fail to obtain financing, green building certification may be one of the first components of construction projects to be eliminated.
Do you agree or disagree?
- Kazakh company erecting 'bold' tower at Yonge-Bloor (cbcnews.ca)
- Developers struggle to secure financing (Globe and Mail)
- Architects Hit Hard by Financial Crisis (Architectural Record)
- ‘A good time to build unless you have to borrow’ (Char. Business Journal)