This Morning's Sustainability Sessions

Industrial real estate has been the last to delve into sustainability, and with good reason—experts from this morning’s educational sessions say it can be really tricky to get tenants on board. (You need to convince them that Earth and machine are not enemies.) And yet, industrial buildings can truly shine green.

Newmark Grubb Knight Frank executive managing director Geoff Kasselman (who leads the firm’s national industrial practice from Chicago) says lighting is the low-hanging fruit in warehouses. It accounts for 30% of all energy use and more than 60% of total electricity use. (How much light do they really need? They're storing books, not reading them.) The EPA’s Clark Reed (national program manager for Energy Star) says a basic T8 or T5 lighting retrofit alone can yield 40% savings with a less than two-year payback.

Liberty Property Trust sustainability analyst Jonathan Payne offered a case study of just how successful a lighting retrofit can be. His company spent $178k to redo lighting in a NNN-leased 388k SF Pennsylvania warehouse. It received an $82k rebate from the utility company and is saving $61k a year in opex ($0.16/SF). That gives the project a 1.6-year simple payback and a 63% annual ROI. The building already had an Energy Star score over 75, and now it’s an impressive 93.

Here’s Geoff, Jonathan, and Clark with moderator JDM Associates principal Deborah Cloutier. The panel agrees that the first step to any sustainability initiative is benchmarking, but it can be amazingly difficult to get tenants to share their utilities data. Jonathan says many are skeptical about why you want the info (thanks, NSA) or just don’t think it’s worth their effort (lead with cost savings rather than sustainability to get around this, Jonathan advises). Even if they agree, the Privacy Act can make it tough to get the data. But Geoff shared his secret weapon to participation—ice cream socials.