News
BRIDGING THE GAP
June 20, 2011
| The rain didn't stop 200 of our readers from joining us Friday morning at the New York City Bar Association for our annual NY Sustainability Summit. (Just goes to show green trumps gray.) |
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| Our landlords panel agreed one of the most difficult things about sustainability is bridging the gap of understanding between landlords and tenants. RREEF director of global sustainability Patty Connolly says that the behavior of tenants is a challenge for asset managers—some view it as another initiative and a time drain. Ultimately, tenants have to be in partnership with you in order to operate your building. |
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| SL Green director of sustainability Jay Black says you have to explore how business and sustainability work together. Often sustainability is used as good marketing, “but truly embracing it is a hard concept.” Real success comes in starting small, and it’s an evolutionary process—build your sophistication over time. It’s imperative for landlords to address all tenants and create a healthy business environment, he urges; the landlord “should be the guiding light and a model for the industry.” Also make sure leasing agents have the tools to educate tenants about sustainability. |
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| Without a clear roadmap, how do you get people to understand and buy into sustainability? Malkin Properties EVP Tom Durels says his firm creates engineering standards, giving tenants a playbook for designing their space to comply with Malkin’s standards. “And I have not seen a tenant not adopt our standards yet,” he points out. But green has to make economic sense, he warns. It’s been a very challenging process, but the biggest motivators are improving the rent roll and operating expenses, which translates into better property value. At the Empire State Building, it had an opportunity to create a model that other building owners can follow. |
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| There are three major issues, says Vornado VP of corporate sustainability Suki Paciorek: data (such as reporting and aligning leases), reduction, and reliability. You have to integrate concepts into normal operation, and a challenge is to make sustainability a normal part of what Vornado does every day. 50% of its New York portfolio is now LEED certified. And banks are looking at sustainability, too. Recent refi packages asked for LEED, Energy Star, and energy efficiency documents, she points out. |
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| You have to ask hard questions, Jonathan Rose Cos director of acquisitions Nathan Taft says. What does it mean to build, renovate, and operate your buildings in a better way? 70% of electric consumption and 40% of carbon dioxide emissions come from commercial buildings, and by 2030, buildings will account for 85% of electric consumption, he says. To help tenants along, JRCo holds competitions in buildings. One tenant that won reduced its energy by 22%. “They don’t understand how easy it could be.” |
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| Twenty years ago, in similar recessionary times, you had to run your building efficiently so that when the owner sold the building, he would get more, says Patty (with the panelists and moderator Michael Rosenblatt, president of The Quest Org). Today, sustainability is rebranding operating efficiency—it’s a fiduciary responsibility we’ve always had. However, some owners got lazy when buildings were selling for astronomical prices, she points out. |
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| Captivated people in our audience ignore their BlackBerries (or are just really good at emailing blindly). |
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| It’s becoming clear that there’s an economic benefit to sustainability, says CBRE national director of sustainability Dave Pogue, who pointed to a three-year study on 160 buildings and their energy and economic performance. Every building in America can be improved, he says, but it’s a question of how to get everyone engaged. The reason 22% of them were more energy efficient was because of separate metering. When tenants are responsible for their own energy use, they’re more efficient, he points out. Overall, New York has a very strong owner/manager environment and is a lower energy market than some others. |
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| There’s a difference between behavior modification and energy conservation (doing well with less, one of the key drivers), says Israel Berger & Associates/Viridian Energy & Environmetal VP of energy & building sciences John Hannum. One problem is that sustainable behavior is a long-term strategy. Build better instead of using less, he urges—look downstream as far as you possibly can for compounded savings. Sustainability is being adopted in building codes, he says, pointing out that only a few years ago, we were still using 1968 building codes. Now many buildings need to be retrofitted and retrocommissioned. There are plenty of incentives available for existing buildings, from NYSERDA to Con Ed. |
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| Now’s the perfect time to focus on implementing improvements, says Con Edison manager of commercial & industrial energy efficiency programs David Pospisil—you don’t have to do it all, but prioritize and do it incrementally, he says. Tenants will be able to shop for efficiency. |
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| Code Green Solutions managing director Christopher Cayten says focus on the downsteam and being an optimum operating building. It’s about reaching out and getting utility info to your tenant. Code Green offers software to track and quantify energy usage, and clients are using the tool to monitor and provide data to tenants. |
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| TLR Energy founder Michael Thaler says that New York and the Northeast are the only places where water is not strong in the decision-making process, but with rates going up, it will be an important issue. We’ll also be relying more on natural gas, he says. |
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| The panelists with moderator David Choy, SVP of WSP Flack+Kurtz. |
