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Jonathan Rose Cos.' Gwen Rowden, Nathan Taft and Paul Frietag

Greening real estate and making money are not mutually exclusive.

By Sule Aygoren Carranza | Updated on February 03, 2009

Smart growth and green building practices have been an industry priority for the past several years. One firm that formalized its entry into the field was Jonathan Rose Cos. LLC, which established the Rose Smart Growth Investment Fund I LP about three years ago. Said to be the first fund of its kind to focus exclusively on providing economic and environmental returns, the vehicle invests in real estate located near transit or in walkable communities, and makes green improvements to the properties.

Backed by capital from high net worth investors, foundations and endowments, the fund has a long-term investment outlook, and typically buys properties in the $10-million to $40-million range, or co-invests in opportunities above that figure, on top of making anywhere between $3 million and $6 million on improvements.

The Rose Smart Growth Fund has made six investments so far–most recently paying $26.5 million for a 198-unit affordable housing community with 4,500 square feet of ground-floor retail at 107-145 W. 135th St. in New York City’s Harlem. The project’s Section 8 contract was about the expire, but the firm worked with the US Department of Housing and Urban Development to obtain an interim renewal and is working on securing a new 20-year contract to preserve the community’s affordability, in addition to greening it.

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