Episode 137: The Growing Market for Green Real Estate with REthink Development
GreenTalk Radio host Sean Daily talks about the bourgeoning industry of green building and the qualities of a green real estate property and with Greg Reitz, Principal and Founder of REthink Development.
Sean Daily: Hey everyone, this is Sean Daily with Green Talk Radio from greenlivingideas.com and Personal Life Media. Welcome to another program. And today we're going to be talking about a perennially popular topic on the program, which is green building. A little bit different spin on it. We want to talk about modern and you know sort of modern green building projects, but also what are the innovative concepts that are happening today. And to talk with me on that topic is Greg Reitz, who is the co-founder and principal of Rethink Development. They're an LA-based real-estate development and consulting company. Greg, welcome to the program.
Greg Reitz: Thank you for having me.
Sean Daily: Our pleasure. Well, first of all, why don't you tell us a little bit about yourself and your background? What got you into green building and where you are today with Rethink?
Greg Reitz: Okay. Well, probably a lot like many of your listeners, I came to the whole green movement - environmental movement - after being in more traditional business. I started my career as a consultant, working as a business consultant - management consultant - and found that to be not a very fulfilling career, although quite interesting and a great experience. And after much consideration, about six years ago, I realized that my real passion was for business, but also for preserving the environment. So I tried to find a way to merge the two interests and then came up with the field of green building. And then just started studying the topic and getting more involved with the industry and meeting people and ended up getting a job as a consultant and then moved on to work for the City of Santa Monica as the green building advisor and was able to work on many different projects in the City of Santa Monica. City of Santa Monica has a very progressive green building program, both promoting green building within the city for their own buildings, but also incentivizing the production of green buildings in the private sector as well. So, that was a great experience and then from there partnered up with someone to launch Rethink Development to focus exclusively on developing green and sustainable projects in the LA region.
Sean Daily: So then at some point you went into the private sector and co-founded your own company. What caused that transition?
Greg Reitz: Well, you know my experience working in the City of Santa Monica was interfacing with lots of developers and trying to promote the concept to them, and in so doing had to do a lot of research and finding out information that would convince them that it was a great thing to do, and so doing essentially ended
convincing myself that it was a great thing to do. And I had a hard time selling it to them, so I figured that if I couldn't get other developers to do it and I was thoroughly convinced that it was the right way to go, not only as an environmental movement, but also as an economic consideration, that I decided that it was, if they weren't going to do it, that I could and found a partner that was interested in doing it as well.
Sean Daily: Now, you say that it's a real-estate development and consulting company. Give us a typical profile of your services and your clients that you deal with.
Greg Reitz: Well, because we do both we have a unique perspective. We're able to understand the process from an owner's perspective, because we're building our own projects. We understand the implications of all the different possible green building measures that could go into a project and understand them from a financial return perspective. So, how much many are you investing and what kind of return are you going to get, both in the short term and the long term. And depending on the type of the project, we can decide what kind of measures are best suited, whereas if we hadn't had the experience of working on our own projects, we wouldn't understand the financial implications of them as well. So, we provide green building design support consulting services as well as LEED certification services to clients, building owners and developers. And then of course, apply the same concepts in our own developments and we try to really - because we control the projects that we're building, we really try to push the envelope in terms of green design on them, because we're able to influence the design to a much greater extend than we can as a consultant.
Sean Daily: And just to clarify: this is strictly commercial building, right?
Greg Reitz: We do commercial and mixed use, and the mixed use includes residential. So, it's multi-family residential with retail. We're also doing straight commercial projects, some of which are office with retail components and some are straight office.
Sean Daily: Okay. Well, so what I would be curious to hear to hear about is some of the key features that you would consider in a green home and/or a green business or office building. What are some of the key features that you guys are recommending and implementing in your projects?
Greg Reitz: Well, one of the key tenets of green building in general is to understand the climate and the area and the conditions in which you're building. And in Southern California we have a couple of overriding considerations, one of which is an abundance of sun and a warm, temperate climate, and another is very low rainfall. So we look at the environmental conditions first and apply those to the buildings. We look at the path of the sun and the direction of the wind and, of course, keep in mind the lack of availability, or low availability of water and the implications of having to import water from a great distance. So, trying to reduce the water impact, the water usage of the project. And so, really focus on first working with the - an integrated design team to create a building that works passively very well, so that it captures the free cooling of the wind and the free heating of the sun, or if we're trying to keep the building cool, making sure the shading is in the right place. All those things, from just orienting the building that can make - that come for free - and we focus on those things first.
Sean Daily: And I understand from people like Bob Rambler, who has been a - who have the Art of Sustainable Living Center in Wisconsin - and people like that, that really the passive design is more important than some of the more active designs in terms of the leverage that they have and the efficiencies that can be introduced into a building project. Is that true?
Greg Reitz: Yeah, that's right. That's basically, you're using good design to accomplish energy savings rather than throwing expensive systems at it. So, just a little bit of thought in the early stages can really make the project so much more efficient, and all you're doing is spending a little time and a little money on design time and making sure that the building orientation is optimized for those passive effects. So, yes it has a great effect and the cost is next to zero.
Sean Daily: So, we're talking about things like what - we're talking about like passive solar thermal and do you do green roofs at all?
Greg Reitz: Yeah. In one of our projects, for example, we're installing a green roof that also open space for the project. And so we're using - we're doubling up on the utility of the space, so it's a space that's beautiful because there's green planted material on it, that people can go up on the roof and they can enjoy that sanctuary, but it's also providing the insulation to the roof and the other benefits of capturing storm water and cleaning the air, reducing heat island effects - all the great things that a green roof provides for you, while also being an amenity to the residents there.
Sean Daily: What does the green roof look like in a typical project? Can you give us a - as best we can do on an audio podcast...
Greg Reitz: I don't know how well I can paint a visual picture, but I'll do my best.
Sean Daily: All right.
Greg Reitz: In this particular case, it uses native plants from around Southern California, which has a certain color palette. Kind of a sage green color palette typically. And it looks, in this case, much like any other native planted garden that would be in the front of the home, or around an office building, simply transplanted to the roof. Because it is an amenity. If it were a functional roof, just meant to provide the benefits that a green roof does, without being this more beautiful garden, then it would have quite a different appearance. It would be little succulent plants planted in a very thin green roof material on the roof.
Sean Daily: Okay, well good. Well if we break right there and I want to come back - when we come back from the break, I want to ask you about some specific questions on behalf of consumers and listeners that are interested in buying a green home, what they might be looking for. So, we'll be right back on Green Talk Radio. We're talking about innovation in green building projects with Greg Reitz, co-founder and principal of Rethink Development, and they are online at www.rethinkdev.com. We'll be right back.
Sean Daily: Hey everyone, we're back. Talking about innovation in green building projects. Talking to Greg Reitz from Rethink Development - and Greg, I wanted to ask you about specific tips that you can give to our listeners who are interested in buying a green home, or building a green home. What should they be looking for?
Greg Reitz: Well, I think the driving force behind the demand for green homes these days is - well I think there's a couple. One in particular that I think has become an important reason for people searching out these homes is the realization that their homes can be consistent with their personal values. So people that care for the environment and care for their health are now aware that they can buy homes that - homes can incorporate the features that they think are important in their everyday lives. So they're looking for the homes that do preserve the environment - that reduce the impact on the environment - and provide for their health. On a very concrete level, the two most important things that people are looking for are: homes that have a direct impact of their wellbeing, which is health and comfort, and then have a payback on their investment by reducing the utility bills. So what people should be looking for when they go look for a good green home are: good daylighting, so plenty of sunlight going into the space so they don't require - provides two benefits: it's a very comfortable and pleasant environment to be in, of course, but then also reduces the electric lighting load needed during the day. If a home is well designed, they shouldn't need to turn on lights during the day at all; they should be able to use the house without any electric lighting whatsoever.
Sean Daily: And are you guys employing products like - I know that there are companies like SolarTube that are making some really innovative products along those lines. Are those the types of products that you're using in addition to just direct, you know, the window? Is there you know those kinds of things to sort of pipe the light down into spaces that are - you know tunnel the light down as it were into spaces that are a little bit more buried?
Greg Reitz: Yeah, we're using that concept, not that particular technology. But the concept of light wells, to bring light deep into spaces or courtyards in the middle of buildings to let that light do down to lower levels. Whereas typical multi-family projects often have double-loaded corridors, meaning a corridor going down the middle of the building with doors on either side. Our projects and other good green-built projects will have units that have windows on both sides and a door on one side so they have access to light and air on both sides of the unit and allow for cross-ventilation, which is another feature that people should be looking for is if I were to open up windows in two locations in this unit will the air flow through and will I be able to gain the free cooling of the natural ventilation, or will I be dependant on my air conditioning unit to cool down the building?
Sean Daily: Which yeah and you know this brings up - you bring up an important point here which is that, you know, green homes - some people think well green is just about energy conservation and things like this and sustainability of the materials that are used, but it's just as much about a home that's a healthy home to live in. And so, you know, that - the example you used of the air conditioner certainly introduces an energy component, there's also just you know the health aspects of having a well-ventilated space.
Greg Reitz: Yeah, that's absolutely true. That you're able to get good, clean outdoor air into the environment and then if you do have some sort of an air conditioning system, or other mechanical system, that it has air filtration in it, so it's taking the particulates out of the air and you're cleaning the air as well.
Sean Daily: So, beyond the things you've mentioned, any other aspects or things to look for?
Greg Reitz: Yes. You can take that health - healthy indoor environmental quality aspect and go further with it and look at the actual materials that are introduced into the environment, so you're not introducing cabinets that have - that are off-gassing formaldehyde into the environment, which is a known carcinogen. And paints that don't have MBOCs in them and carpets that likewise don't off-gas into the environment, so anything that's going to add toxins into the environment and make sure that those have been kept out in the first place.
Sean Daily: And that's interesting. You mentioned a few important ones, you know you've got things like carpeting, or wood flooring and the finishing, and we actually just did a podcast with a company called Carlyle, who does pre-finished wood floors, sustainably sourced wood flooring and they're doing pre-finishing to address that issue. We've talked to paint companies, you know because you've got painted walls, then you've got furniture which has lacquers and such and veneers and things like that on top, so like and you have to think about your couches and everything has potential of off-gassing.
Greg Reitz: That's right, and although most homes don't come with the furnishings, one of the things that we like to do is to complete the loop by telling them where they can get - if they need to repaint, where they can get paint and where they can get furnishings that are also green, so they can have a complete home that's green from what we build to how they occupy it. And green cleaning materials that they're introducing into the environment, which also have the potential for introducing toxins if they're not making the right selection.
Sean Daily: Well that's great. So you guys are very holistic in your approach. That's good to hear because it seems kind of silly that you spend all this money on a green home and then you proceed to put completely toxic substances in generally cleaning it and the furniture you buy and it seems pointless at that point.
Greg Reitz: Absolutely.
Sean Daily: Great. Well so, here's a question that always comes up: the money question. It's a two part question. And the first part is: hey, does this cost more to do this?
Greg Reitz: Oh, well it does. It doesn't cost as much as many people think and one of the keys to this business is figuring out how can we do - meet all of our environmental goals at the same time as not making it impossible to afford. So what I started with, which was focussing on the passive features is key, focusing on delivering energy efficiency and lower utility bills, without having to invest in really expensive mechanical systems to do that, but rather focusing on proper shading and natural ventilation and daylight. So those are some of the techniques that we use to achieve our environmental goals and then overall efficiency in construction and selecting materials that are less impactful in the process. And we do end up spending more money than a typical project.
Sean Daily: What's a typical premium? If you can boil it down, if you can give us an average of the price premium in building one of these projects, versus maybe the same one done in - I don't know how to say it - a non-green fashion without consideration of these issues?
Greg Reitz: It's a hard question to answer, in a way. We are building relatively high-end units that one expects certain features, whether they are green or not, so it becomes something of an accounting issue. Whereas maybe on a low-end, entry-level home these things wouldn't be expected, so it would be considered an additional cost. So, that said, we're probably spending in the range of 2 to 3 percent more to build a very green home than we would to build just a very nice home.
Sean Daily: 2 to 3 percent does not seem unreasonable to me at all.
Greg Reitz: Not at all, and I think, because of the way it's done a lot of the focus is on things that have a return. Some that are quantifiable, such as lower utility bills and durability, and other things that are not quantifiable, but are certainly very valuable, which is making a healthier environment for people to live in.
Sean Daily: Absolutely. So I mean, based on that kind of premium, so are these homes ending up saving your average consumer that's purchasing this kind of home money in the long run?
Greg Reitz: Absolutely. There's no question that the value is there.
Sean Daily: Because, I mean, the maintenance costs alone - it's taking less to operate the home on top of everything else and that's where a lot of the costs come into play.
Greg Reitz: Yeah, that's right. The utility bills are fifty percent lower in some cases, so you can imagine how quickly that would pay itself off. And like I said, those are the things - those things that have the direct benefit to the owner are the things we do first. So it's reducing utility bills and it's making it a healthier place to live in.
Sean Daily: Do you have a particular project that you'd like to share with our listeners that has been interesting or notable in any way?
Greg Reitz: We have one project in Hollywood that's currently under construction which we're very proud of. It's called "Cherokee Lofts". It's twelve condo units and 2800 square feet of retail on the ground floor and it's already won an award, even though it's not completed. And because it is expected to get a very high LEED rating - at least gold, if not platinum - we will see where it ends up. But certainly, it's a very high - highly performing building. And once again that was done by focusing on the features that would have the greatest impact and provide multiple services at the same time. So that's the one where we have the publicly accessible green roof, so like we said all the benefits of a green roof, but also an amenity for the people who live there. It has a double facade, which is a very unique feature that keeps the hot sun off the surface of the building. So if you can imagine a building and then wrapping a skin around it ten inches away from the building and the skin is a perforated metal skin, so it's - even when it's covering windows you can still see out and enjoy the view, but it's keeping direct light off the surface of the glass so you don't have overheating on the inside.
Sean Daily: Yeah, that's cool. I'm just looking at it as you're talking about it. I just clicked through to your website and I'm looking at it as you're talking and it's very - it's an intriguing concept. It's very cool. For anybody listening in, check out rethinkdev.com and go to CherokeeLofts.php - that'll bring you to the page. It's a very interesting design.
Greg Reitz: Yeah. The facade itself actually is operable, so you can actually open it up - accordion doors - so you can have a clear view, or if you want to provide the shade you can close that down. You'll still have the view, but have the services provided by the double facade.
Sean Daily: And so this is twelve condominium lofts in 2800 square feet. Is that right?
Greg Reitz: Yeah. And it's on the historic site of the historic Cherokee Studios which is a place were 300 gold and platinum albums were recorded and we're keeping some of the memorabilia from Cherokee Studios and incorporating it back into the building. A couple of the units actually have recording studios in them to carry on the legacy of Cherokee Studios into the future.
Sean Daily: What were some of the artists, do you know offhand?
Greg Reitz: Yeah. It was Frank Sinatra's studio 1. He did most of his recording in earlier days and then Elton John has recorded there and Snoop Dogg and Lemonheads and everyone in between. Lots and lots...
Sean Daily: That certainly runs the gamut right there. Frank Sinatra to Snoop Dogg. You've covered a wide gamut of musical. That's great.
Well listen Greg, we're out of time for today, but I want to thank you for being on the program with us.
Greg Reitz: Yeah, thank you very much for having me.
Sean Daily: Yeah, my pleasure. So we've been talking today about innovation in green building projects. My guest has been Greg Reitz, who's the co-founder and principal of Rethink Development, down in LA, and you can find them online again at www.rethinkdev.com. Thanks, everybody.