Renaissance writer John Heywood said that many hands make light work. And, while he most likely wasn’t talking about sustainability goals in commercial buildings, he could have been.
The simple fact is that building owners and managers are most successful in their environmental efforts when they have full buy-in from tenants. Happily, that’s a task that has grown increasingly easy over the years, as sustainability has become better understood and embraced by tenants and even has become part of many corporate mission statements.
Sustainability has become standard operating procedure for many corporate occupiers, according to Michelle German, senior manager of Operations for LBA Realty. "We’re finding a lot of our tenants have statements of corporate responsibility on their websites, and, as we partner with them, we can leverage our resources to help them achieve their goals," she notes.
German says that green-friendly mission statements often reflect a corporate culture that is pro-environment in very practical ways. And, both she and Kim Saunders, BOMA Fellow, RPA, CLO, property manager for East Port Properties Ltd. in St. John’s, Newfoundland, Canada, have found that many young professionals entering the workforce tend to expect their workplaces to embrace sustainability. Either top-down or bottom-up, both scenarios make the cooperative goal of sustainability a smoother ride for building management.
Needless to say, in addition to the environment benefits, there are practical business goals also driving the sustainability movement. Through LBA Realty’s leveraging efforts, German explains, "we add value to our relationships with our tenants." More sustainable buildings also are good for the broader community, fostering additional goodwill.
It would seem those are compelling enough reasons for manager and occupant alike to join together in reaching a building’s sustainability goals. Yet, sustainability itself is a topic that needs to be sustained, or else it stands a good chance of slipping to wish-list status as the demands and fires of the occupants’ daily businesses take over.
"You obviously need the buy-in of your tenants," says Saunders. "You could put all the policies, procedures and programs in place that you like. If your tenants don’t buy in, the programs won’t work. So, it’s important you engage tenants every step of the way."
LEAVE IT TO THE LEASE?
Here, management walks a fine line to embed programs and then encourage and inspire occupant participation without hounding. Much of this, of course, can be handled in the lease, as BOMA International points out in its just-released update to its popular commercial model lease agreement, Green Lease Guide: A Guide for Landlords and Tenants to Collaborate on Energy Efficiency and Sustainable Practices.
"For example, our leases require that, if tenants are doing renovations, they use green products," reports Saunders. "New tenants also have to meet certain standards with equipment and furnishings."
"We have a standard template that incorporates green language," adds German. "Brokers can strike through it, but the language exists on both the industrial and office sides."
Once the lease is signed, however, it too can fade into memory and be filed away—literally and figuratively. Then, it falls to building management to keep sustainability top-of-mind, in essence to become advocates for energy, water and waste management. Done right, an ongoing combination of communication and education will not only serve the building’s operational goals, but it also will send a clear message about the tenant/management relationship German describes.
"A sustainability toolbox [for our property management teams] has such resources as tenant scripts if managers aren’t sure what to say or ask. We have case studies that people can access to see what other properties in our portfolio are doing."
—Michelle German, LBA Realty
Jason Sielcken, AIA, knows a thing or two about cultivating that tenant buy-in. As an architect and senior project manager for the U.S. General Services Administration (GSA), he was the design and construction manager for the renovation of the 41,562-square-foot Wayne N. Aspinall Federal Building and U.S. Courthouse in Grand Junction, Colorado. It was a watershed project for the federal landlord: It became the first building in the agency’s portfolio to be both on the National Register of Historic Places and net-zero energy. Today, the 100-year-old federal building has garnered a wheelbarrow full of accolades, including LEED Platinum status.
During the project’s 2013 renovation, Sielcken and his team were key in the process of setting parameters for operational performance. This meant he also had to be an advocate for sustainability and focus much of his efforts on educating the agencies occupying the building. These agencies range from the U.S. Marshals’ office and the Internal Revenue Service (IRS) to the U.S. Army Corps of Engineers. "Tenant education early in the process was key to our agencies’ understanding our goals for the building," Sielcken says.
During design and construction, regular meetings were held for that very purpose, explaining both building-wide and tenant-based initiatives. On the first score, they discussed such applications as daylight harvesting and load-shedding circuits.
On the second score, "these meetings focused on a whole host of topics like equipment purchases," he explains, including suggestions to "shift from desktops to laptops or purchase equipment with sleep modes. We also discussed the energy benefits of keeping office temperatures a few degrees higher in the summer and cooler in the winter. We discussed taking advantage of the building’s natural light and the use of task lighting to keep overhead lights off longer.
"This was new, something we hadn’t done in the past," Sielcken continues. "And, as we worked with our design/build contractor and the tenant agencies, it became apparent that working with the agencies at this level would be a big part of our success in this project, getting buy-in and then their support and momentum."
TOOLS OF THE TRADE
As building management supports occupants in achieving energy goals, there also are tools that support management’s efforts. Key among these is the forthcoming ENERGY STAR® for Tenants program by the U.S. Environmental Protection Agency (EPA), specifically geared towards tenants that now is in the pilot phase.
In the program, occupants and managers alike are recognized for the EPA-designated design criteria they achieve. (And, the power of recognition cannot be underestimated in getting occupants behind energy goals.) There are key actions critical to the process: sharing data; estimating and metering energy use; and lighting efficiently and using efficient equipment—as in the Wayne N. Aspinall Federal Building.
Obviously, communicating the importance of such programs falls to management. Sielcken says that, in addition to keeping occupant agencies abreast throughout the design and construction process, his group also provided a tenant guide for all building occupants. "It highlighted major aspects of the modernized building and how certain elements operated," he explains. "It also gave tips as to what employees could do to further reduce energy consumption in their offices."
All three professionals interviewed for this article—German, Saunders and Sielcken—report that so-called "green teams," groups combined of management and tenant representatives, are in place to share information and resources.
German and Saunders often bring in outside experts to discuss new initiatives, such as LBA Realty’s recent installation of battery-storage systems and how tenants can benefit from such initiatives. These systems store energy in off-peak hours when energy costs are low and deploy during peak demand to help stabilize the grid and keep costs down. East Port featured a presentation by the Multi-Material Stewardship Board, which funds waste management initiatives in Canada.
"We also communicate with them through memos with advice they can use," adds Saunders, citing "carpooling and such." The memos are customizable so corporate occupiers can apply their own brand to them.
No matter how on-board corporate occupants might be, interfacing with them, as always, demands a "more-flies-with-honey" approach. LBA Realty takes a further step to ensuring how the message is delivered with what German describes as "a sustainability toolbox." She explains: "It has such resources as tenant scripts if managers aren’t sure what to say or ask. We have case studies that people can access to see what other properties in our portfolio are doing."
The firm also conducts an LBA Academy for its employees, a monthly get-together designed to "ensure that sustainability is integrated into the culture." In addition, annual action plans in place for every property in the firm’s portfolio help direct what more could be done on the energy front.
BIG DATA, BIG DIVIDENDS
One of the most powerful tools in any property manager’s toolbox, no matter what it’s called, is the collection and sharing of performance data. ENERGY STAR’s Portfolio Manager® tool allows property managers to benchmark their properties relatively easily. Obviously, the collection of such data was a critical piece of getting the rehabbed Wayne N. Aspinall Federal Building online.
"That information plays a big part in that ongoing tenant-relationship piece in these types of buildings," says Sielcken. Management can see "how energy is being consumed in that space and then feed that information to the occupant so they can make decisions about how they use the space and better contribute to the building’s overall energy goals."
"[For sustainability to work,] you obviously need the buy-in of your tenants.…It’s important you engage tenants every step of the way."
—Kim Saunders, East Port Properties Ltd.
In the meantime, the nature of that data becomes more robust as "property management gets better at understanding how the tenants in that space work," explains Sielcken. Occupant arrival and departure times all become part of the building’s fine-tuning, he adds, informing "setpoints and time frames within the building’s automation system that are more refined."
Data also is being folded into LBA Realty’s toolkit. "We’ve started to gather utility data from our tenants," says German. "We can take this knowledge and give our tenants ideas on how to improve their energy performance. It’s another way for us to partner with our industrial tenants, especially because their performance is not in our control."
But here, too, knowing how to disseminate that information is key to keeping interest and buy-in high. "When setting energy goals and targets, we try to keep those performance periods short," states Sielcken. "Shorter target periods work better to keep people focused and engaged. This also allows us to provide better recognition for people’s efforts, and it gives time for tenants who maybe didn’t meet their target in one period to take action and meet their target during the next period without compromising the annual energy goal for the building."
While property managers have been using Portfolio Manager to track their energy costs for years, ENERGY STAR added the functionality to also benchmark water and waste last year. This year, BOMA International launched a new, two-year initiative to support the commercial real estate sector in benchmarking water and waste consumption and improving performance using the Portfolio Manager tool, the W2 Challenge. In fact, LBA Realty has already committed part of its portfolio to the challenge.
THE NET LEASE CHALLENGE
Leases can set the baseline for green expectations, but, in some cases, they also can hold building ownership and management at arm’s length. The lack of control that German referenced earlier is a direct result of the triple-net leases that turn over most operational considerations to LBA Reality’s industrial tenancy (today, that accounts for easily 60 percent of the firm’s portfolio). This type of lease agreement is becoming more common with office tenants, too.
But, arms-length doesn’t mean hands-off, and German and her team are still proactive—if more subtle—advocates for sustainability. Just as in their office leases, there is contractual language in the triple-net agreement. Beyond that, German’s team focuses on education and careful persuasion to garner more support.
She says some of the industrial tenants would be prime candidates for the aforementioned battery-storage application. "The system could help them shave their peak demand and lower their utility bill," she says. So, the firm held lunch-and-learn meetings to introduce the concept to occupants and extol the installation’s advantages.
Batteries went online at Park Place, LBA Realty’s headquarters and a BOMA 360-designated mixed-use development in Irvine, California, almost a year ago, German explains. "It was the largest indoor battery-storage application at the time," she says, "and it’s been an extremely successful project. In our first year, we realized significant savings over our original plan."
The performance stats were served up at the lunch-and-learn, so tenants could decide if it was the right choice for them. "The tenants have to make the call," she stresses.
And that, more than anything else, underscores the importance—and occasional frustration—management faces in a sustainability effort that works best only when it’s a shared concern.
Ultimately, once the lease is in place, along with the programs, meetings and advocacy efforts, building managers have to leave practices to their tenants’ discretion (see "Sustainability and the Soft Sell," page 25). Flipping the lights off at the end of the day or opting to keep the AC a little lower in the heat of the summer are not habits that can be mandated.
After all, as John Heywood is credited as saying, "You can lead a horse to water…" Well, you know the rest.
ABOUT THE AUTHOR: John Salustri is editor-in-chief of Salustri Content Solutions, a national editorial advisory firm based in East Northport, New York. He is best known as the founding editor of GlobeSt.com. Prior to launching GlobeSt.com, Salustri was editor of Real Estate Forum.