Building the Future at SolTerra

In Seattle and Portland, theres a new kind of apartment building taking shape. With green roofs, living walls, solar panels and energy efficiency built into every corner, the projects from Portland-based SolTerra represent what company founder and President Brian Heather sees as the future of design and construction.

SolTerra is founded on the idea that building green isnt just a lifestyle choice, but a smart financial move. Heather started the company in 2008, when he was 25 and the United States was entering a massive recession. He came from a background in solar systems, and at first the company focused only on solar design and installation. Some people thought I was crazy because I opened an office in Portland in July 2009, Heather says. But there were a lot of good things going on with solar at that time.

His insight on the market paid off. SolTerra grew between 60 and 65 percent in the first year, and for the next five years that growth rate didnt waver. Heather developed a living wall design that used less water and weighed significantly less than other systems on the market, and received a patent in 2013.

The business built a strong reputation as a favored provider for projects seeking green certification or net zero energy use. But Heather was frustrated by too many projects whose developers werent willing to invest in his companys ambitious designs. We didnt really have full control and responsibility, Heather explains. So we would get to the end of a project and they would run out of money.

His solution was to include every step of building sustainable residential housing under SolTerras umbrella, creating a branch of the company called SolTerra Cities that brings in investments, acquires a property, and handles the design, construction and leasing from start to finish.

Heather wants to prove that building sustainably can be a successful business strategy. So far, its working. SolTerra posted $30.5 million in revenue in 2015. The company guarantees its investors an 8 percent return, a promise it has exceeded with every project.

Solterras first design-build endeavor, the Woodlawn in Portland, won an award from the U.S. Green Building Council for outstanding leadership and innovation in the residential green building marketplace. The company now has more than a dozen buildings either completed or in progress, and in August 2016 it acquired a 10,000-square-foot lot at 1208 Pine Street in Seattle for $7.5 million. The plan is to develop a seven-story apartment building with a green roof, ground-floor retail and a rooftop restaurant space.

That building, like all that SolTerra puts up, will be LEED Platinum certified, the highest possible certification from the Green Building Council and a standard the company feels strongly about. Buildings represent a ton of energy use, Heather says, and we arent moving as quickly as we should be.

LEED stands for Leadership in Energy and Environmental Design and was developed to encourage sustainable building and encourage a green building market. The Green Building Council says LEED-certified homes are designed to use 30 to 60 percent less energy than a traditional structure. In 2015, U.S. Energy Information Administration data showed that residential and commercial buildings accounted for 40 percent of U.S. energy consumption.

LEED certifications require sustainable practices at all stages of the building process. Projects receive points for a range of measures, including using reclaimed materials instead of new, reducing emissions, and providing high indoor air quality and water efficiency. Because SolTerra is vertically integrated, Heather explains, its able to experiment with different building and design strategies to figure out the best approach for the environment and for investors.

One example is an awning the company designed for the Woodlawn. The building had to have awnings because of its location in a historic district. SolTerra decided to make them solar, using glass-on-glass panels manufactured in Washington. After the tax credit, Heather says, the solar awnings cost less than traditional glass ones.

In the building industry, there really is such a disconnect between control and responsibility, Heather notes. Everybodys trying to protect themselves from risk. He sees this caution as a limiting factor in adoption of innovative green building practices and hopes SolTerra can push others in the industry to consider change.

What were trying to figure out is how to take the information weve learned up until today and help other people use that to develop and build good buildings, he says. When you have a vision, you really have to have a group of people that are all totally aligned. Thats hard to do with too many companies involved. Once you get there, once you have that recipe defined, then you have something that becomes a little bit more scalable.

The residential green construction market in the United States is expected to grow from $55 million in 2015 to $100.4 million in 2018, according to the 2015 Green Building Economic Impact study prepared by Booz Allen Hamilton.

But Heather and SolTerra are dreaming bigger. Well definitely be involved in more international projects, Heather says of his business plan for the next five years. Weve spent so much time building this brand into something that people can really identify and connect with, we would like to be involved in not just sustainable buildings but whole communities.

Heather also thinks SolTerra can help build policies that will make it easier for green design to spread. Hes particularly interested in pushing for better zoning incentives for green development. And he says the company could have a role in financing sustainable projects in the future, potentially by creating loans that allow developers to think long term.

Residents of Seattle will soon have the opportunity to live in a building designed by SolTerra. The company has three local projects in the works: one in West Seattles Alki neighborhood and two on Capitol Hill in the Pike/Pine corridor. Theyre designed, Heather says, not just for energy efficiency but to promote community.

Its not just about putting up a box that doesnt use very much energy or water, he explains. Its about making sure these are really healthy places to live.

The rent varies by neighborhood, but Heather says SolTerra has been matching market rates and successfully leasing every one of its buildings so far.

The first way we do it is not necessarily the best way, Heather points out. So we figure out new ways to get there. But we arent changing the destination at all.