Redbrick LMD White Paper Explores How Its Decarbonization Strategy Creates Value

At a time when the push for emissions reductions and decarbonization is declining in some jurisdictions, a white paper released by Redbrick LMD yesterday at the Global Impact Investors Network (GIIN) West Coast Impact Forum makes the strong business case for how sustainable development can create long-term economic value while also mitigating risk. The white paper, Value Creation Through Decarbonization, explores the work of Redbrick LMD, a pioneering real estate development and investment firm that is developing more than 10 net zero carbon buildings in Washington, DC. The GIIN West Coast Forum brings together impact investing executives focused on driving change in the Americas.

“The discussion about sustainability and specifically decarbonization in real estate has largely focused on mission-driven environmental and social benefits. For years, we have focused on sustainable development, and decarbonization in particular, as a long-term strategy to optimize returns for our investors,” said William Passmore, Managing Partner, Redbrick LMD.

Redbrick invited a national expert who has studied the relationship between real estate decarbonization and economics for many years to review its pipeline of projects, both to test their thinking and to provide a case study that offers fresh approaches for other real estate investors and developers to consider. The white paper examines Redbrick’s approach as it develops its pipeline of more than 8 million square feet. Key findings from the interviews and research associated with creating this white paper include:

1. Decarbonization Can Create Value and Mitigate Risk

Redbrick views decarbonization as a strategy aligned with achieving strong financial returns through lower operating costs, cost-effective construction, and the potential to capture premiums.

2. Decarbonization is Achievable at Economic Parity to Conventional Buildings

A common misconception is that sustainability must come at a premium. Redbrick is demonstrating that whole life cycle-net zero carbon (WL-NZC) buildings can be developed at economic parity with conventional buildings.

3. Decarbonization Requires New Thinking and Approaches

Real estate development relies heavily on heuristics (‘rules of thumb’) and is resistant to innovation including the adoption of the integrative design approach that is needed to cost effectively develop net zero carbon buildings.

4. Decarbonization Comes from Commitment, Discipline, and Diligence

Achieving net zero carbon in real estate is not about finding breakthrough technologies but about mindset and disciplined execution.

5. Decarbonization Uses Existing Materials and Technologies

Sufficient building materials, technologies, and approaches to meaningfully decarbonize buildings are all in existence and accessible.

6. Decarbonization benefits from a Long-Term Horizon - Opportunity Zones Offer “Hidden Value”

A sizable portion of Redbrick’s net zero projects will be in an Opportunity Zone (OZ), which offers some additional potential benefits. OZ regulations created a powerful tax incentive for investors to adopt a 10-year investment horizon. Building a net zero carbon or high performing green building can have higher upfront costs but over ten years lower operating costs and strong tenant demand increases net income.

The white paper’s author, Paul Rabinovitch, is a national expert in real estate decarbonization and the author of Investment Opportunities in Decarbonizing Real Estate (2024). He has been working at the intersection of real estate, sustainability, and impact investing, and leading organizations that merge financial performance with environmental and social value. For a copy of the full white paper, here is a link.

About Redbrick LMD

Redbrick LMD is a diversified real estate investment management and development firm focusing on proprietary, large-scale, institutional quality assets. With an objective of value creation and risk mitigation, it employs an innovative and forward-looking approach to sustainability and resiliency such as pioneering a strategy in the U.S. to decarbonize real estate and developing resilient solutions for national-security related initiatives.

One of the largest private landowners in Washington, DC, Redbrick has a build-to-core development pipeline of approximately eight million square feet as well as a comparable amount of early-stage development located across the country. Redbrick has already delivered the largest multifamily building in the world to seek International Living Future Institute (ILFI) Zero Carbon certification and its pipeline includes 10 additional buildings being developed to similar or higher decarbonization standards.

For more information, visit our website.

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Redbrick LMD white paper makes the strong business case for how sustainable development can create long-term economic value while also mitigating risk.