Weekend Interview: Hines' Michael Bjes On Sustainable Real Estate And Mass Timber Development

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Hines Vice President of Construction Michael Bjes is a bit of a weekend warrior. If he’s not coaching both of his sons’ baseball teams, then he’s probably out for a 20-plus-mile run or training for his next Iron Man race.

Bjes told Bisnow that practicing endurance sports gives him lots of time to think. Lately, he’s been thinking a lot about mass timber and how it could make commercial real estate developments more sustainable in the future. 

At Hines, Bjes is putting these thoughts into action. He started working with the firm as a carpentry contractor about 14 years ago. Then in 2014, Bjes decided to join the firm full time as it expanded its operations in Denver. 

One project that Hines recently topped out is T3 RiNo, a six-story, 235K SF mass timber office project in Denver’s River North business district. The building’s timber was sourced from black spruce from the boreal forest and its design is 100% renewable, nontoxic and recyclable. It also features a 5K SF fitness center, private outdoor terraces and enough storage for 100 bicycles. 

In this interview, Bjes speaks about what sustainable real estate development means to him, some of the ideas that shape his understanding of sustainability, and how mass timber can play a big part in achieving sustainable development goals. 

This interview has been lightly edited for length and clarity.

Bisnow: What does the term "sustainable real estate development" mean to you and what does it look like?

Bjes: To me, sustainable real estate development means thinking about how we can change the way we’re building and operating our buildings for a better future. It’s not just about creating a culture of reasonable and educated people who understand the issue. It is also about partnering with vendors, subcontractors and consultants that share your sustainability goals. It’s really holistic. 

We try to take it a step further than that at Hines and really work hard to support our tenants' sustainability needs as well. That could be a built-to-suit project where we optimize the building during design or in cases where we share lessons learned from our own decarbonization efforts. So, sustainable real estate has to be holistic. It runs all the way from design all the way through holding the asset long-term. 

Bisnow: Why is sustainable development important to you and to Hines?

Bjes: At Hines, we’re a fully integrated firm. We’re not just building the improved environment, but we’re also managing and operating these assets over the long term. So we’re constantly optimizing the energy of these buildings, frankly, because it’s the right thing to do for the environment. But also, it’s right for the bottom line.  

A case study we discuss within our organization is the Salesforce Tower in Chicago. The building was originally planned to be a speculative development, but after Salesforce became the anchor tenant, they really began to challenge Hines to become more carbon-conscious as related to embodied carbon. So our team tackled the tech and structure and found ways to reduce the building’s overall carbon footprint by about 18%. That’s also a great example of Hines responding to our tenants' needs.

Bisnow: Your most recent project in Denver, T3 RiNo, is mass timber, which is being incorporated into more projects across the country as a more sustainable alternative to concrete and steel construction. How do you see mass timber scaling into new developments across the country, especially as design choices change to meet post-Covid tenant demands in offices?

Bjes: There’s no question that it will grow. It has to. Right now it is a little more expensive to do mass timber projects, but that’s only because it’s a relatively new thing. However, demand is growing and I think competition will grow as more projects arrive on the market. 

For us, the decision to build mass timber in RiNo was a market-based decision to put out a differentiated product. But it was also an environmental sustainability decision. We sourced young trees from managed forests. So not only are they a renewable resource, but the trees will actually capture more carbon as they age and we’re reducing the amount of carbon in our buildings by using these trees. At T3 RiNo, we calculated that the building has 38% less carbon than if it were built with steel and concrete. 

Bisnow: Mass timber has some limitations, such as the height to which buildings can be constructed with it. Do you think the industry will find ways around these limitations in the future?

Bjes: Every day, there are people who are challenging building codes so that we can do more with timber. On May 1, Denver adopted its new building codes that allow for Type 4B construction without encapsulation, which is a big change. 

Before that code was adopted, we had to wrap drywall for fire protection. They did that because mass timber products have been tested to perform without the encapsulation. Part of it is managed by the design of the wood. I think there’s just this mindset of “if it’s wood, then it’ll burn,” and that isn’t necessarily true with mass timber products when they’re engineered properly. It’s a very safe product.  

Although it’s not a Hines project, The Ascent in Milwaukee is a great example of how mass timber can be used for tall developments. It’s a 30-something-story multifamily building that was built using mass timber. It’s really given other jurisdictions the confidence to look harder at this.

Bisnow: Hines developed some of the most recognizable buildings in Denver, including the Cash Register Building and 1144 15th St. How do you see premium office products like this becoming more sustainable over time? Is there a way for these trophy office assets to obtain the levels of sustainability needed to mitigate the CRE industry's carbon footprint?

Bjes: There are a couple of things we need to do. First, we need to start looking more closely at adaptive reuse. We’ve studied a few here in Denver, and they’re challenging because an office layout is not the same as a multifamily layout. But there are strategic assets here in Denver, and other cities across the country, that I’m sure could be converted really well. One of the issues we run into here in Denver is parking. Building amenities can also be challenging. 

The other thing we need to do is rally behind what the city of Denver is doing as far as energization and clean energy goals. We have to get smarter about how we’re operating these buildings. The things we do here in Denver influence what happens in places like Phoenix, Austin and San Antonio. They’re learning from what Denver is doing as a progressive city. 

Bisnow: How is Denver doing in terms of sustainable real estate development? Where are the city's opportunities for improvement? How does it compare to other cities?

Bjes: Denver is really progressive compared to the other cities I mentioned earlier in terms of its focus on higher-performing buildings and with its green code. By loosening the bootstraps on the requirements for heavy timber, it gives developers here in Denver an opportunity to provide a differentiated product. Now almost every type of developer wants to do mass timber. It was a brilliant move because you’re going to see folks do more of it. Sooner or later it’s going to leave the office space and spread to multifamily and other asset types. If commodity prices ever stabilize, then we could see it crawl into industrial development as well. 

Bisnow: Many companies that have specialized in office development are getting into other product types. Hines is best-known for office and multifamily development, but does the company anticipate diversifying in the near future, into life sciences or data centers, for example?

Bjes: Life sciences is something that we’re looking into both in Colorado and Texas. We actually have quite a bit of speculative life sciences development in Texas and we’re hoping to take the lessons learned in that market and transfer them here to Colorado. One example of a building we finished in Texas is Levit Green in Houston. We’ve also done senior living and self-storage developments as well.

Bisnow: Give us a bold prediction for the rest of the year. 

Bjes: The Denver Nuggets will win the NBA Championship … and the Colorado Rockies won’t make the playoffs.

Bisnow: That’s not bold!

Bjes: I really hope that the industry continues to rally behind the idea of carbon reduction, specifically as it relates to embodied carbon, in 2023 and beyond. Operational carbon has a lot of momentum. Frankly, people really understand how to do it. There are hundreds of strategies and even more consultants who can show you how to do it. But the embodied carbon movement is still in its early stages, and we’re still learning how to accurately track that data. Once we are able to capture that data, we’ll be able to use it at the design phase which would eventually translate into lower carbon emissions overall. 

Bisnow: What is your weekend routine or favorite weekend activity?

Bjes: I try to keep it really simple these days. I’ve got two young boys, aged 5 and 9, and they’re obviously very active. I manage both of their baseball teams. Personally, I’m into endurance sports. I was a triathlete for a while and have done a couple of Iron Man races. I’ve also participated in some ultramarathons. They give me opportunities for self-improvement, both physically and mentally. These sports have been a part of my life for 15 years now and I hope to keep doing them for a long time.