Posts Tagged ‘commercial real estate’
Real Estate Developer Leases Rooftops to Power Companies to Install Solar Panels
Developer and Real estate trust ProLogis looks upward to ’electricify’ its cash flow and reduce its overhead.
ProLogis, who owns more rooftops than anyone in the world, announced plans to develop the rooftops (equal to 10,000 football fields) of their existing buildings, and lease the space to power companies to install solar panels.
From the press release:
Headquartered in Denver, Colo., as a manager and developer of real estate, ProLogis is actively seeking out electric utilities to lease out its rooftops as a way to earn extra income with no capital investment, while meeting the company’s goal of contributing to global sustainability.
As a real estate investment trust, ProLogis isn’t interested in owning the solar installations, but rather in engaging utilities as a renter of its space. Utilities make solid tenants that will enter long-term leases, as most power-purchase agreements for solar power generation are for 15 to 20 years.
ProLogis manages more than five hundred million square feet of industrial space and they are putting all of it to good use on three continents. Actually, ProLogis owns more rooftops than anyone in the world – they have available space in twenty-four countries across the globe. The amount of space is equivalent to approximately 10,000 football fields.
Although Prologis continues to develop new buildings on virgin land, their plan to put solar panels on their rooftops is a win-win for ProLogis, power companies and the environment. It makes good use of existing, undeveloped real estate, feeds the electrical grid and generates cash flowAdded Bonus: In addition to increasing cash flow for ProLogis, adding the solar roof panels also insulates their buildings, reducing their operating costs and their carbon footprint, simultaneously.
Kudo’ to Prologis for thinking “out of the box” and on the grid. Maybe it will encourage other developers to do the same.
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Commercial Real Estate Values- “Watch Out Below”
While the US housing crash is certainly not breaking news, the likely crash in commercial real estate values may be.
Now bankrupt, Lehman Brothers, attempted to dump their commercial portfolio’s, without success. Insurer AIG, who will face insolvency in the absence of a bailout, also has a huge portfolio of commercial property that they will be forced to liquidate. Bank of America, Wachovia, Citibank, Merrill Lynch and other financial behemoth’s are also likely to dump billions of dollars of commercial real estate on the market, as they race to head off bankruptcy.
This progression in the collapse our financial systems spells much more misery for the US home owner. The human casualties will continue to rise, as thousands of “potential” home buyer’s will be eliminated from the housing market due to job loss. In addition, we are likely to see an increase in housing inventory, as displaced workers can no longer afford the payments on their over priced homes.
It seems the real beneficiaries of the tax payer bailouts, which doubled the US national debt, are the banks of China and Japan who hold billions of dollars in US government sponsored enterprise (GSE) debt.
So, what does this mean for you and me? In a nut shell, falling real estate values, more unemployment, more homelessness and more suffering.
Why is it happening? The policies of the Bush administration, who found it unnecessary to regulated or supervise the greedy bankers, most of whom are its friends and contributors.
Is there an upside for residential homeowners? The short upside is that the Fed will likely be forced to lower interest rates this week, which will help those who need to refinance or those who trying to qualify for a loan.
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