The Investor: Amidst All The Talk of Sustainability, Wendy Rowden of Jonathan Rose Cos. Sees Green
Carl Gaines March 12, 2012, 9:30 a.m.
Wendy Rowden is managing director, Investments, at Jonathan Rose Companies, an affordable and mixed income housing developer. The company focuses on new development, like its Via Verde project in the Bronx, and green retrofits, which Ms. Rowden discussed last week with The Commercial Observer.
The Commercial Observer: How long have you been in your current position, and what’s your focus?
Ms. Rowden: I have been here for almost three-and-a-half years. We have been focused on what we would call ‘practical green’ for the entire length of our firm’s history. We think that energy savings and using green products is part of best practices in real estate practice so for us we just view it as part of our day-to-day operations—it’s in our DNA.
We have a series of private equity funds that are focused on acquiring existing buildings and repositioning them by doing a targeted green retrofit. So we invest in two types of properties—multifamily, primarily affordable and mixed income, and we also invest in Class B office. Our funds acquire these properties and strategically make capital investments. But the money that we put in is using proven technologies that are probably a little less sexy.
What are some of those less sexy technologies?
It’s more about the insulation, boilers and leaky windows—things that any good owner should be focused on. We’re typically buying Class B office that has some vacancy in place so part of this is about rebranding the building, making it a nicer building, doing things like upgrading the lobby and then leasing up the building.
Is the response from tenants positive?
It is. More and more people are focused on what’s happening with oil prices and also with toxicity with materials. We have found that our projects—and our portfolio is across the country—have higher occupancy than their competitive set in the market because office and multifamily tenants much prefer being in a building that is viewed as being more energy efficient and has more healthy materials in it.
Did you have an interest in sustainability before you started at Jonathan Rose? Do you recycle at home?
Do I yell at my kids to turn off the lights when they leave? Yes, absolutely. I have been interested in these issues, frankly, since I was in high school. The focus when I was younger was really on pollution, but over the years has really evolved into people’s actions—built environment and energy consumption. The things that we are doing are not only good longer term for the environment and for cities, but equally important they are drivers of economic returns. We won’t make investments unless we think it will improve the economic return of the building.
Can you talk more about why it’s profitable from a business standpoint? How do you monetize that?
The investments we make have to be investments that do one of two things. They have to reduce operating expenses in a relatively short period of time. And when it comes to office buildings and market rate multifamily, we’re also looking to investments that make the building more attractive to market tenants. The investments that we make in affordable housing projects won’t affect the rents—they’re regulated. So every dollar that we put in has to, over a relatively short period of time, come back to us.
Are you currently targeting any New York City area buildings?
We are very much in the market and we’re looking at a number of opportunities, but it’s a little early to discuss.