Green Canopy is pleased to announce the successful wind-up of the Birch Fund. The Birch Fund is the firm’s third Real Estate Impact Fund. The Fund, managed by Green Canopy Capital, provided capital to acquire and construct certified green and energy efficient residential projects in Seattle, WA and Portland, OR. The Birch Fund deployed $15.3M in capital from 60 impact investors from around the nation, The Fund returned an annualized IRR to investors of 10.7%, in line with investor expectations.

The Birch Fund enabled Green Canopy to build 102 deep green and healthy homes across Seattle and Portland. Of these homes, 10 were Net Zero Energy and 8 were Net Zero Energy Ready homes. “By opting to build deep green, sustainable homes that far surpass code requirements, Green Canopy has been able to mitigate 731 metric tons of greenhouse gases. That’s equivalent to us planting over 12,000 trees,” says Sam Lai, Co-Founder of Green Canopy.

Impact investments are made with the intention to generate positive, measurable social and environmental impact alongside a financial return on invested capital. In 2011, Green Canopy began Green Canopy Capital, a wholly owned fund manager to scale the Firm’s impact through impact investments. Impact investors have fueled all four of Green Canopy Capital’s funds, ensuring ongoing alignment with Green Canopy’s mission and theory of change, while also providing a healthy financial return. 

“As our family foundation shifted focus from grant-based mitigation to investing in systems change, our relationship with Green Canopy Homes has evolved from an interesting new portfolio company to trusted impact partner. Across three generations of funds, as well as special projects, we are proud to (profitably!) support the development of all-electric, highly efficient homes in thriving, walkable communities.”  – Jim Norton, Rouse Family Foundation

As a portfolio company of the angel investment group E8, Green Canopy is delighted with the ongoing partnership in aligning investor capital to our fund offerings. E8 is an international, Seattle-based investor community whose mission is to accelerate the transition to a prosperous and cleaner world by investing in and fostering emerging cleantech enterprises.

“Green Canopy and their fund offerings have been a staple investment for many of our members since 2010, with Birch Fund being the most recent example. Thank you to the Green Canopy team for delivering on expectations and maintaining regular communication and transparency,” says Mike Rea, Executive Director of E8.

Green Canopy’s fourth fund, Cedar Fund, was deliberately structured as a resilient real estate fund capable of generating income regardless of the cycle. To date, the Cedar Fund has raised over $7M in investor capital from 30 impact investors from around the country. “As society continues waking up to realize the uncertain state of the world, more and more investors are also coming to the realization that in order to create a better world, they must invest in creating that better world. Impact investing provides a clear pathway to do so, ensuring not simply a focus on financial returns but also ensuring positive social and environmental outcomes,” says Susan Fairchild, Director of Investor Relations & Impact.

FOR MORE INFORMATION PLEASE CONTACT:
Susan Fairchild
susan@greencanopy.com

IMPACT INVESTING IN GREEN HOME DEVELOPMENT AIMS FOR PROFITABILITY ON A TRIPLE BOTTOM LINE

FOR IMMEDIATE RELEASE:

SEATTLE, Washington (December 22, 2015) – Green Canopy is excited to announce that we have eclipsed a major milestone with our second Impact Debt Fund. The Alder Fund is a Real Estate Impact Investment Fund that is managed by Green Canopy and designed to lend on the development of certified green and guaranteed efficient homes. It has now issued its last loan and will begin winding down – issuing distributions as loans repay over the next 6-9 months.

With the help of the Fund and all of its participants, Green Canopy completed 50 high efficiency homes across Seattle, reaping a total energy savings of 532,000 kWh per year.  “We have mitigated over a million pounds of carbon in the last two years by building Green Canopy homes. That’s the equivalent of planting nearly 30,000 trees every year,” says Sam Lai, the CMO of Green Canopy. “These are metrics that our investors look at when they consider putting their capital to work for a cause. Of course it is also about returns, but not just so.”

The Alder Fund launched in October of 2013 with $7.7MM. Of the 50 Green Canopy homes that were built, nearly 25% of them were sold at price points below $450k in an effort to attract middle and lower income buyers in the Seattle market. These pricing targets were set by Washington State Housing Finance Commission, who partnered on several projects with Green Canopy with the hopes of providing green and energy efficient homes to buyers who also qualify for the Commission’s down payment assistance programs.

“This Fund, which eventually lent over $29MM for the completion of 50 homes, has been especially prosperous, and is an indicator of what mission aligned and market driven capital can accomplish,” said Andy Wolverton, the Fund’s manager and CFO of Green Canopy Homes. “The Alder Fund’s success is certainly reflected in our triple bottom line – and brings more than just monetary returns to our investors.”

The return profile for the Alder Fund is 9-12% annualized - and so far it is on target to achieve that goal. Over 50% of the investors have reinvested in the Birch Fund, Green Canopy’s third Impact Investment Fund which began raising capital this summer. The Birch Fund is targeting a total raise of $20MM and hopes to increase the number of affordable homes for sale here in Seattle and in Portland.

FOR MORE INFORMATION PLEASE CONTACT:
Andy Wolverton
andy@greencanopy.com
O) 206.792.7283

Contributed by: Aaron Fairchild, CEO of Green Canopy, Inc.

I have often cited Daniel Goleman to explain a consumer’s desire to make an impact with his or her invested dollar. In Ecological Intelligence, Goleman explains that consumers will always buy what they perceive to be a less toxic or more environmentally friendly product given price parity with a competing product. While the consumer may not be buying the perceived “better” product to make a positive impact in the world, they are likely buying it because they view the product healthier or better for their family. 

This consumer behavior pattern offers a direct analogy for financial investors. It goes without saying that investors invest capital to generate a return. If an investor can invest in an opportunity that generates a similar risk-adjusted rate of return to competing investment opportunities yet the investment will also deliver outcomes that better align with their values, then the investor will likely choose to invest their capital in such a value-aligned opportunity. 

Enter Green Canopy. Our mission is transformational; our company was deliberately created with the mission to inspire resource efficiency in residential markets. We have two impact product offerings for consumers to buy.

Our primary impact product is our homes. We build homes that are more environmentally sustainable than what is required by city code and  have third party  audits  verifying our homes meet or exceed a local or national green building standard. In other words, a Green Canopy home is healthier for the planet, consumes less energy to operate (we guarantee that), and is simply a better home than the comparable code-built home. The kicker: we price our homes for sale on par with other homes on the market. We have to price our homes competitively with other homes because if we don’t, buyers would choose to acquire the less expensive yet comparably located and sized home. So buyers of our homes acquire a Green Canopy home at a competitive price that delivers outcomes that align with their needs and values. 

Our second impact product is our real estate fund offerings. We currently manage two debt funds that generate competitive returns for investors. If it were not for these funds, we would not have enough debt financing to build more environmentally sustainable homes at our current scale. Investors in these funds buy membership units that are designed to generate competitive rates of return and deliver outcomes that align with their values. 

I believe the United States has entered a relatively new era where the general market is looking for values-aligned solutions. I witness this daily in both of our product offerings. However, most consumers and investors remain price sensitive and will continue to be so. This is where many people believe the government and foundations can play a role. However, I don’t believe it is incumbent on the government or others to subsidize product offerings, or for that matter the market to simply accept the market-price mismatch. 

Entrepreneurs innovate. The role of being an entrepreneur is to figure out how to bring new product to market in such a way that the market is willing to pay for it. Government incentives and infrastructure are helpful catalysts and support structures for market change. But the role of efficiently bringing new product to market is ultimately the role of entre- and intra-preneurs. 

Additionally, foundations, the government and other mission-driven sources of capital can aid in providing lower cost of capital to kick-start product offerings and help stimulate demand (think of the Bullitt Center or the ZHome development). However, values alignment should not be seen as an impediment to bringing socially and environmentally impactful product offerings to market—it should be used as a competitive advantage. Sound business people focused on values-based product offerings will continue to innovate within the cost/price constraints of the market and ultimately bring more and more highly sought after product to meet consumer demand. Impact alignment and the balance between supply and demand are really just a matter of time and innovation.