Rebuilding Better: A Greener Approach to Tenant Buildouts

BY CAROLINE POMILLA

Whether it’s the demise of the open office floor plan or a resurgence in remote work, the jury remains out on what a post-COVID-19 office will entail. For certain, we can expect that a heightened emphasis on health and wellbeing will bring new tenant perspectives to workplace use and design. Commercial real estate professionals must be prepared to accommodate these changing demands, partnering with clients on build-out and renovation projects geared to promote occupant wellness at the highest degree.

At a time when the relationship between environmental health and public health has perhaps never been more apparent, the office sector has an opportunity to improve the current build-out and renovation process through more sustainable practices. And, this approach isn’t just better for the environment—it can also benefit your (and your tenants’) bottom line.

GETTING TENANT BUY-IN

When a tenant moves into a commercial space, that space is usually fully customized to their needs—including the design, layout and finishes. How the tenant decides the space should ultimately look and function depends on a wide variety of factors, and sustainability isn’t necessarily always one of them.

"While the decision to go for a sustainable build-out is ultimately a tenant’s, property professionals are well-positioned to advise their clients throughout the process to ensure they make choices in the best interest of their companies," says John K. Scott, BOMA Fellow, RPA, senior executive managing director with Colliers International. According to Scott, it just so happens that sustainable options—which can include benefits like long-term financial rewards, aesthetic appeal, a strong workplace culture and branding opportunities—are often those that will bring a tenant the most value. In such cases, getting tenant buy-in is just a matter of communicating that value in a way that resonates with the client.

"It’s all about educating your tenant and knowing their business objectives," says Don Erb, BOMA Fellow, FMA, RPA, senior sustainability associate for the University at Buffalo. "For instance, if the client’s objective is to keep their staff productive and efficient, you can talk to them about the impact environmental elements like natural light and air quality have on employee performance," he explains.

Many clients are simply unaware that sustainable options exist or that these options come with benefits. "There’s a value proposition to be made for almost every factor within a build-out," says Josh Richards, CEM, LEED AP O+M, director of Sustainability for Transwestern; which means property professionals must be as exhaustive as possible when sharing these options with tenants. "Present as many pathways as possible to creating sustainable space, eliminating waste and reusing objects and materials all up front," he explains. This will increase the likelihood a tenant considers one or more sustainable alternatives during their build-out and it also will help them narrow down which options fit their budget.

According to Richards, part of crafting these value propositions is reminding tenants that the cost of a sustainable build-out, which he estimates can run 5 to 10 percent higher than the standard build-out price, will pay off in the long term. "Clients don’t always initially see their rented space as an investment," he points out. "They’ll often discover down the road that the provider and landlord only cover so much: Utility costs, for example, fall back on the tenant itself." Plus, a sustainable build-out offers branding opportunities that can be quite fruitful: "I’ve seen clients take raw materials from the construction phase and turn it into a beautiful table or art piece, which allows the company to share their sustainability journey with visitors."

MATERIALS MATTER

With any tenant, the path to completing a sustainable build-out or renovation should be customized to fit their needs. Almost every path, however, can be tied back to three key materials-based considerations:

  1. Reuse what you can. For starters, the method used to clear materials out of a pre-existing space can make a significant difference, according to Katie Mesia, AIA, LEED AP, senior associate and studio director with design firm Gensler. "The U.S. Environmental Protection Agency (EPA) reports that the American-built environment creates more than half a billion tons of debris every year—90 percent of which is from demolition," she notes. Unlike demolition, which renders existing materials unusable, deconstruction is a careful disassembly process that can salvage 95 percent of a project’s materials. "Reusing materials reduces waste and conserves the water, energy and other resources that would be needed to create something new," she explains.

    "Instead of completely demolishing a space and starting from scratch, our approach begins with evaluating what might be reusable," shares Scott. As chair of Colliers International’s Broker Sustainability Practice Group, Scott trains the company’s "middlemen" on how to educate clients about this approach and any other sustainable options and resources available. By presenting tenants with simple alternatives—like staining or painting the doors rather than replacing them—Scott and his team have been able to reduce the material used to build a second-generation space by about 30 percent.

    But, the search for reusable materials doesn’t end on the property site, according to Erb. "Don’t just look inside your building, look in your area," he advises. "Items like gently used light fixtures and doors should be readily available within your community."

    Taking it beyond the fixtures, Richards adds that even drywall can be reused, thanks to emerging technologies that are able to grind the product down into raw material. "Without having to deplete a natural source and go back to mining it, we can actually recreate that material," he explains.

  2. Redirect waste. Once project teams have addressed ways to integrate reusable materials in the space, they must consider a sustainable way to dispose of any materials and resources that will not be used. Scott’s company will sometimes store the materials for future use, but they’ll also look for options to sell, donate or trade materials in the marketplace. Scott shares that there are even philanthropic organizations, such as Habitat for Humanity, that can use material donations to build affordable homes.

    Richards adds that any furniture left behind by outgoing tenants also can be donated. "Typically, this furniture might become the burden of the management team or the new tenant, but there are now companies you can partner with who will handle the advertising and collection of these items," he says. In addition to redirecting those items from the landfill, a high-volume donation may offer the bonus of a tax deduction.

    Creative recycling incentives can even add some fun to the build-out process, according to Mesia. "During one of my projects, we gave ‘lottery tickets’ to any worker who was seen placing metal in the recycling bin," she explains. "Once the bin was full, the metal was sold, and a lucky winner received the money!"

  3. Think long term. When it comes to new materials, the project team should design with longevity in mind. This means considering materials that can be recycled in the future, such as metal and glass. It also means considering durability and how certain items will interact with other elements in the space. For example, Richards points out that bamboo may be a recyclable product, but it doesn’t last long in a high-traffic space. "The same goes for hardwood floor: It might be a renewable material, but it’s not going to last the length of an industrial client’s lease term," he explains. Opting for sturdy materials that aren’t designed with planned obsolescence in mind reduces consumption over the lifetime of a space—a win for both the tenant’s wallet and the environment. Plus, these elements tend to offer a "sleek, refined, highly aesthetic appeal," Richards says.

BEYOND THE BUILD-OUT

The build-out may only be the beginning of a space’s story, but the actions taken at this stage can play a foundational role in ensuring continued sustainability success throughout the lease term—and even beyond. Developing a clear operational plan that aligns with the new design is among these critical actions. "You can have these blueprints for a beautiful, sustainability-oriented space, but those blueprints can easily become wishful thinking if there isn’t a plan to ensure the space continues to be utilized and maintained as it was designed to be," says Erb.

In fact, Scott shares that this is an area where he sees the most waste, in terms of both energy and resources. "We do a lot of recommissioning and retro-commissioning of building systems because, over time, people will allow their space to veer away from its intended settings," he explains. These issues underscore the value of green leasing. "Going into a project with a green lease in place will help initiate the sustainable build-out conversation and it also establishes baseline expectations for how the tenant and its occupants should interact with the space post-construction," says Scott.

Now may be the perfect time to re-evaluate the approach to the tenant build-out. As workers begin to transition away from working from home as pandemic risks abate, creating beautiful, sustainable spaces will help reinforce the value of being back in the office.

This article was originally published in the May/June 2020 issue of BOMA Magazine.

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