Billionaire Tom Steyer's Real Estate Decarbonization Firm Buys First Asset
A real estate firm with a buy-and-decarbonize strategy has bought an industrial building as its first acquisition.
The 84K SF industrial property in the Baltimore-Washington infill corridor was bought by Galvanize Real Estate, the property arm of global investment firm Galvanize Climate Solutions, founded by former Democratic presidential candidate Tom Steyer and Hall Capital Partners founder Katie Hall. The firm raised more than $1B for its inaugural venture fund as of its first close in February 2023.
Galvanize Real Estate was founded in October 2022, and its first acquisition — of 6610 Amberton Drive in Elkridge, Maryland, near Baltimore/Washington International Thurgood Marshall Airport — launches its strategy of buying industrial properties in that corridor.
Galvanize didn't disclose the price, and the sale hasn't yet been posted to Maryland land records. It most recently sold in 2021 for $9.7M and was valued at $8.7M at the beginning of the year.
Through its sustainability initiatives at the Maryland property, including rooftop solar, mechanical upgrades and other energy-efficient improvements, GRE expects to boost cash flow and asset value.
“6610 Amberton is a great representation of our acquisition strategy,” GRE Vice President of Acquisitions Rachel Reardon said in a statement.
“It is a supply-constrained infill asset at the heart of the Baltimore-Washington corridor, which we believe we are acquiring below replacement cost at an attractive initial yield,” she added, calling the acquisition “the first of many in the corridor.”
GRE's release says the company expects to reduce baseline emissions at Amberton by a minimum of 95% through solar power, electrification and energy reduction initiatives. Another 43% in emissions reductions could be achieved through tenant partnership, the release says, noting both existing tenants have sustainability goals and are interested in reducing costs and carbon emissions.
“I’m thrilled that GRE has made its first investment in the Baltimore-Washington corridor, a target market for us due to its strong real estate fundamentals and sustainability factors,” Galvanize Head of Real Estate Joseph Sumberg, a former Goldman Sachs executive, said in a statement. “The team can’t wait to begin executing on our business plan, which will include profitably decarbonizing the property.”
Sumberg spoke to Bisnow for a special report on sustainability in real estate published this week, saying the time to invest in decarbonization is now, not at some later point.
“[Lenders] will be left behind from a profits perspective and a returns perspective. And they should be fearful of that,” he said. “The vulnerability associated with climate change is significant.”
Last spring, Galvanize announced that in the summer of 2023 it would start making “sizable” investments in existing multifamily, industrial, student housing and self-storage assets across the U.S. At the time, Sumberg said the firm would focus investments across the western U.S., specifically in the Pacific Northwest, Colorado, California, Arizona and Texas.
