By Eileen Carey
Everyone in the commercial real estate industry has felt the growing gravitation towards "green" buildings. Yet with today's economic challenges, some may be wondering if things have changed. The good news is that while the current down cycle may be slowing decision-making and capital outlay, it has not quashed enthusiasm for and commitment to this new focus.
There is little doubt that meeting the U.S. Green Building Council's LEED qualifications has become a long-term vision among real estate developers and owners. While owners have to cut operating costs during tough economic times, property managers must still identify ways where they don't have to sacrifice sustainable programs.
Property managers who continue to focus on energy efficiency, environmentally friendly programs and strong community mindedness will create value within their buildings and be poised to have their buildings become LEED certified with little capital outlay when the market turns around.
In today's environment, energy costs typically represent the largest controllable operating expenses in office buildings. According to BOMA, the commercial real estate industry currently spends approximately 28 percent of a building's operating costs on energy. This equates to $24 billion annually and 18 percent of the U.S. carbon dioxide emissions.
Logically, then, energy has become the main motivator in certifying buildings as LEED. Measuring consumption and demand and optimizing building automation systems according to the buildings' load profiles can save thousands. Of course, it is important that the building meets its operational requirement, but by making sure the property is running efficiently, a manager can reduce its overall operating costs and increase value.
Additionally, an increasing number of industry players are seeing the importance of doing their part to make a difference. Recently, for example, Cushman & Wakefield signed a Memorandum of Understanding with the United States Environmental Protection Agency (EPA), aimed at addressing environmental issues in the commercial real estate sector. We are focused on reducing the environmental impact of our own offices and the buildings we manage by cutting energy consumption in more than 3,000 buildings by 30 percent by 2012. Part of Cushman & Wakefield's energy reduction plan is in implementing the EPA Energy Star Program. A number of our facilities in the tri-state area have already become Energy Star rated, and we have protected many of our clients from the rising cost of utilities.
Looking ahead, property managers anticipate creating a number of programs to save energy and reduce our overall occupancy costs while maintaining tenant comfort and satisfaction. The convergence of long-term sustainable strategies with short-term economic rewards can be accomplished by renegotiating service contracts, implementing water savings strategies, reviewing normal building operations with a focus on saving energy and manpower and changing preventive maintenance procedures from fixed timeframes to more predictive maintenance (using statistics). Adjusting thermostats for consistent temperatures during changes in seasons, expanding the use of meters, upgrading BMS controls, retrofitting lighting and adjusting off-hour energy use are all creative ways property managers put their LEED plans into action.
Outperforming other management professionals starts with benchmarking utility consumption, detailing operational plans and preventive maintenance schedules, and recording HVAC data. Ascertaining this information allows building owners and managers to determine the best first steps to reduce operating costs, improve tenant satisfaction and becoming LEED Existing Buildings Operations & Maintenance certified. Once a database has been formulated, management can conduct a gap analyses to identify where a building complies with LEED standards and the additional LEED points that are achievable. This gives a property manager the "road map" to obtaining the 34 points required to become certified.
By utilizing this strategy when analyzing a 400,000-square-foot building in Bergen County, N.J., Cushman & Wakefield changed the bathroom faucet aerators, reducing the water flow from 2.0 gallons per minute to .5 gallons per minute. A small investment of $1,600 resulted in a savings of more than 438,000 gallons of water per year.
Astute managers must also consider incentives, rebates and carbon credits in their approaches to improving operations and obtaining high returns. For example, in a Cushman & Wakefield-managed Class A office building in Westchester County, N.Y., we replaced 30-year-old chillers with a combination of gas-powered and energy-efficient centrifugal chillers. This significantly reduced the CFCs at the property as well as overall energy demand. This project not only qualified for rebates, but also lowered operating costs and reduced the building's carbon footprint.
Beyond cost savings, property managers are seeing that national, high-profile tenants are seeking LEED-certified buildings. The implementation of their own corporate social responsibility/sustainability objectives has played a major role in the selection of leased locations. Therefore, LEED properties will enjoy a true competitive edge from a marketing standpoint.
In order to make buildings more competitive and improve asset value, managers must constantly look at ways to improve efficiency. In becoming LEED accredited and working with MEP engineers, managers can push new building standards for energy conservation. Educating tenants through "green" community events and educational handbooks also promotes a cooperative effort in this initiative. As an industry, it is our responsibility to provide operational excellence not only for our clients but for the future of our world.
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