Abstract
Environmental sustainability in real estate continues to be of interest, and various government incentives have emerged to encourage investment in sustainability efforts. In this detailed case study, we examine one incentive, the Federal National Mortgage Association's (Fannie Mae) Green Initiative and Green Globes certification, as applied to a newly constructed multifamily complex. Using a discounted cash flow model with several scenarios, the after-tax returns for the multifamily project are examined. In this case study, we analyze the initiative's impact on the project, showing the effects of the lower financing costs. The conclusion is that in addition to societal benefits, lower operating costs, and higher rents, the rate of return can be higher for properties that utilize Green Globe's special financing.