GEORGIA SPOTLIGHT -- Site Selection magazine, January 2006

Green Is as Green Does

y role is to make money for AIG," AIG Global Real Estate President Kevin Fitzpatrick told an audience in November at the national GreenBuild Expo in Atlanta, organized by the U.S. Green Building Council. "These are not bad words," he added.

Nor is he finding environmental soundness bad for business. Among the 53 million sq. ft. (4.9 million sq. m.) in 50 countries that he manages (as well as 30 million sq. ft. [2.8 million sq. m.] in development), Fitzpatrick can point to Atlanta's 138-acre (56-hectare) Atlantic Station as an ideal case of brownfield redevelopment — as well as an ideal use of AIG's own insurance products for such work.
"We've been pleasantly surprised by the interest in Atlanta in moving downtown," Fitzpatrick said. But no one could be more surprised than the numerous lenders who declined to participate in AIG's venture four years ago. Now, said Fitzpatrick, they call more often, even though fiduciary evidence to back green building's energy conservation advantages is still accumulating.

Kevin Fitzpatrick, president of AIG Global Real Estate; Jim Jacoby, chairman of Atlantic Station; and Rick Fedrizzi, president, CEO and founding chair of the U.S. Green Building Council, celebrate Atlantic Station's LEED silver certification, the nation's first for commercial high-rise core and shell construction. Ground was broken in November 2005 on a second office building in the development.

   In Atlanta, the area now home to a mixed-use renaissance was once an abandoned steel mill. Today, in addition to tiered housing that's selling as fast as it can be built, the area boasts a bevy of new retail, including the region's first IKEA store, and a new bridge connecting to the heart of midtown Atlanta. The first office building in the complex is home to Wachovia, and work on the second building began in November. The work has been helped by expedited zoning.
   In doing the math for his audience, Fitzpatrick explained that the tradeoff between increased building costs to "go green" and the energy savings sometimes doesn't add up. But when the building benefit accrues to the tenant by means of slight rental premiums, expedited leasing and a perceived marketing advantage, then the premium can make it profitable. Add to that picture the increased interest by some pension funds in socially responsible investing and the excess global capital looking to invest in real estate, and the prospects of green building grow even more enticing.
   The waxing popularity of Atlantic Station among law firms has meant that up to 30 percent of the new building is already pre-leased. AIG plans to build as many as 10 more office buildings there, offering as much as 6 million sq. ft. (557,000 sq. m.).