- Marcel Arsenault invested $4.5 million in solar projects last year.
- This year, he plans to invest $10 million.
- His companies also invested more than $200 million in real estate last year.
Marcel Arsenault, one of the nation’s savviest and prescient commercial real estate investors, plans to more than double his solar energy investment this year.
Last year, Arsenault’s Real Capital Solar, an affiliate of Louisville-based Real Capital Solutions, invested about $4.5 million in solar installations in Colorado.
“We hope to ramp up considerably this year,” Arsenault said.
Through a collaboration with Namaste Solar, the company has helped build and finance a total of 1.55 MW of solar facilities for clients located throughout Colorado.
The 1.55 MW portfolio includes:
- A 336 kW system at Peak to Peak Charter School in Lafayette;
- A 345 kW system at Kaiser Foundation’s Wheat Ridge site;
- And four solar facilities totaling 869 kW for Mesa County Valley School District 51.
The schools and Kaiser own their own buildings. Real Capital Solar owns the equipment and “is the supplier of the energy, if you will,” Arsenault aid.
These installations expanded the company’s renewable portfolio, which also includes a 169 kW solar system at its home office in Louisville, as well as a 10.5 mW wind farm located in Idaho.
These solar installments will provide power to more than 5,000 students as well as the personnel located at Kaiser’s medical office building in Wheat Ridge.
The successful development, construction and financing of each project is a clear demonstration that solar is a viable business that will lead to a more sustainable future – a future in which renewable energy resources are seamlessly integrated into daily life, according to Arsenault, whose predecessor company, whose real estate investments have never lost money to outside investors since he launched his company during the savings and loan crisis in 1984. His investments have averaged about a 30 percent internal rate of return.
At the peak of the market in the mid-2000s, anticipating a crash, he sold about $300 million in commercial real estate assets, and then shorted homebuilding and banking stocks.
During the Great Recession, he began buying real estate again, focusing on homebuilders such as Denver-based Village Homes and distressed condos in Florida.
Last year, his companies invested more than $200 million in commercial real estate and plans to invest more than $330 million this year.
Before he started investing in real estate, he founded Rocky Mountain Yoghurt while working on his PhD in molecular biology at the University of Colorado in Boulder. In 1983, he sold the yogurt company to Beatrice Foods for $1.5 million.
However, it’s more than about just making money when it comes to sustainability, said Arsenault, who has long championed a green lifestyle.
“We want to be responsible corporate citizens, and we’re looking to expand our solar footprint by another $10 million in 2014 to exemplify our commitment to good business practices and ecological sustainability,” Arsenualt said.
As a result of the expansion, in 2014 Real Capital Solar will generate 2,580 MWh of renewable energy, offsetting 3.46 million pounds of carbon from CO2 emissions, which is equivalent to 51,660 trees cleansing the air for one year, or eliminating the emissions from the burning of 178,413 gallons of gasoline.
Arsenault said investing in solar is not as lucrative as investing in commercial real estate.
“The returns are not as high as in real estate,” Arsenault said. “Solar is a very, very complex business with a lot of legal and regulatory barriers.”
So why do it?
“We do it partly for he social benefit and party for tax benefits, because it has both,” Arsenault said.
“Unfortunately, solar is not at the point where it can stand on its own,” with no subsidies, he said.
He said one competitive advantage he has is that he is able to obtain bank financing on his solar investments.
“I had to guarantee the loans, something which I was willing to do,” he said.
Arsenault said by investing in solar, and other green measures, he not only is giving back to the community and being socially responsible, but it helps him recruit the best and the brightest.
“I think some of the brightest young people are emerging in this industry; they have a social consciousness.
“It ain’t just about the money.”
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.