Between 2002 and 2009, Gerding Edlen built 3,200 condos valued at $1.6 billion. Naturally, that didn’t work out too well for anyone. The article goes into all the juicy details of investor losses and bank repos, but that’s not the part I’m interested in. This is:
With the condo boom over, Edlen is trying to reposition the company to be the national leader in green building makeovers.
The green economy is in.
Gerding Edlen’s strategy is to buy completed or partly finished buildings at bargain prices, retrofit them with state-of-the-art energy-efficient technology and then either sell the buildings or hold them and lease them out.
Edlen is convinced sustainable building has finally arrived as a viable business strategy, thanks in part to the Obama administration’s view of the green economy as one of the country’s primary economic engines.
“You’ve got to get your hands dirty and do deep retrofits,” Edlen said. “It’s about insulation, new windows or reglazing existing windows, it’s about new water-use strategies.”
The Oregonian article is followed by several negative comments from readersâ€”sadly, that’s often par for the course in a public forum. Yet, I think Gerding Edlen deserves some praise for keeping their head above water during the deluge. And their new course is the right thing to do, for their business, the people who buy or rent from them and for conservation of our natural resources.
In related news, The Economist recently asked, “Is Oregonâ€™s metropolis a leader among American cities or just strange?”
Here’s an excerpt from the article:
Joel Kotkin, a Los Angeles-based demographer and author, thinks that places like Portland, San Francisco and Boston have become â€œelite citiesâ€, attractive to the young and single, especially those with trust funds, but beyond the reach of middle-class families who want a house with a lawn. Indeed Portland, for all its history of Western grit, is remarkably white, young and childless. Most Americans will therefore continue to migrate to the more affordable â€œcities of aspirationâ€ such as Houston, Atlanta or Phoenix, thinks Mr Kotkin. As they do so, they may turn decentralised sprawl into quilts of energetic suburbs with a community feeling.
That is not to belittle Portlandâ€™s vision. It is a sophisticated and forward-looking place. Which other city can boast that its main attraction is a bustling independent book store (Powellâ€™s) and that medical students can go from one part of their campus to another by gondola, taking their bikes with them? Other cities will see much to emulate…Adam Davis of Davis, Hibbitts & Midghall, a Portland polling firm, says that Oregonians like to consider themselves leaders but also exceptions. They are likely to remain both.
It’s safe to say Gerding Edlen’s desire to retrofit old buildings to exacting green standards is a leadership position and an exceptional path, not frequently taken by real estate developers.
As for Kotkin’s claim that Portland is an elite city, I don’t see it that way, although I know what he means. Houston would be a much easier choice for a young family to make. Portland is, in fact, an expensive place to live and the wages here have not kept pace with the rise in cost of living, particularly real estate valuations.
Anyone who is on the ground in Oregon today knows the economy is weak, but I think the future portends good things. Many people are retrofitting not just buildings, but their entire way of thinking and doing business, and as this process unfolds we’re going to see business and civic interests align in impressive and unprecedented ways.