Real Estate Matters: Important to be focused on the future of sustainable property management

Property management in the commercial real estate space is a specialized industry. It requires cutting-edge knowledge on numerous subjects such as construction, accounting, project management, landscaping, economic trends, HR and several other disciplines. That said, one of the most pressing areas that both building owners and property managers need to be on top of is sustainability. This topic requires people to think urgently now about the long game.

Salt Lake City has some new ordinances that are creating some immediate urgency in this area. Last year, the city council approved a benchmarking ordinance that requires all commercial buildings larger than 25,000 square feet to track and report their energy usage to the city. Building owners/managers are mandated to track energy consumption annually using the U.S. EPA’s Energy Star Portfolio Manager software. This ordinance was supported by USGBC Utah, which is the regional arm of the U.S. Green Building Council, the organization behind the celebrated LEED certification.

Initially, this was met with resistance by some because if the building is not energy-efficient, tenants and potential tenants will see the information and it might result in them being deterred from becoming future tenants. That said, owners and institutional owners in Utah and around the nation are becoming more savvy in their understanding that building, maintaining and managing sustainable buildings is not a fad and it is not going away. They are waking up to the need to employ green materials and implement best practices in an effort to become at the very least LEED certified, if not silver, gold or even platinum. More owners than ever before are asking their property managers to integrate a hefty budget for sustainability efforts. 

Transforming large buildings to a greener state can be a daunting thought, but it doesn’t have to happen overnight and it doesn’t have to be a financial burden. Property owners should be aware that there are several resources that property managers can employ that are free or low-cost. For instance, Rocky Mountain Power has programs that help owners and managers understand the process of benchmarking, provide assessments and submit incentive applications. These efforts are designed to result in increased energy efficiency and electricity cost savings. 

The truth is, it can start small. A review of the building’s lighting is an easy place to start that can have a big impact. An assessment with Rocky Mountain Power can help owners and managers understand where efficiencies in the lighting system exist and how swapping to LED lighting and energy-efficient platforms can save money. Additionally, many rebates exist for LED lighting, car charging stations and others. And what may be surprising is that many of them are free.

Utah is Attracting Savvy Tenants

Utah is growing in leaps and bounds and as such it is attracting companies that never would have considered relocating or building satellite offices in Utah before. A natural outgrowth of this trend is that tenants coming from places like California have not only become used to living and working in a green environment, but they are demanding it of building owners and managers. They are asking to see the certifications and requesting the Energy Star scores — they are and will continue to be incredibly savvy. Consequently, developers and property managers have to be ahead of the trends as opposed to following the trends when it comes to sustainability. Some top trends to be on top of are as follows:

1. Implement a recycling program. According to the most recent data from the EPA, 262.4 million tons of trash was generated in the United States in the past year. This waste consists items people use and discard such as plastics, product packaging, grass clippings, furniture, clothing, bottles, food scraps, newspapers, appliances, paint and batteries. It comes from homes, schools, universities, hospitals and businesses. What company leaders and building owners need to know is that in the average workplace, the EPA estimates that about 80 percent to 90 percent of solid waste is recyclable. 

Many savvy employers want recycling programs to help with employee engagement. Many, including those coming in from states such as California, recycle at home and their previous workplaces and they want that to continue so they can feel like good stewards. Recycling programs are a way building owners can become more attractive to prospective tenants. 

2. Monitor mechanical systems. To optimize longevity, and ensure buildings are running as efficiently as possible, owners and managers should monitor mechanical systems. 

A building’s electrical, lighting and HVAC systems all consume energy; therefore, a clear understanding of these current system conditions is integral to any energy management strategy. The basics of optimizing start-and-stop times of an HVAC system and minimizing run-times can save hundreds of operating hours per year, leading to significant energy savings.

Balancing the effective conditioning of spaces without overcooling and initiating simultaneous heating and cooling conserves energy. Property teams must also understand a building’s sequence of operations, including occupant HVAC system adjustability and system set points. The sequence of operations and operating protocols should be reviewed as the building loads and use change.

An important infrastructure detail to analyze is the level of automation. What is automated? How is it automated? Is more automation required? Careful consideration must be given to selecting and implementing an energy management system (EMS) that is engineered to control and optimize various system components to produce overall system efficiencies. 

3. Start tracking utilities. Utility tracking is important so the team understands where, when and how energy is consumed. Utility tracking programs can be purchased and some real estate companies offer these programs as a service to their teams. Energy Star Portfolio Manager is another tool that tracks utility consumption.

4. Always communicate with tenants about new and ongoing initiatives.  Communication is key to understanding and success. When tenants know about the sustainability efforts being engaged in, they are more willing to participate and make it a part of their corporate culture. Once that happens, real change can begin to take place and building owners and tenants can begin to reap the benefits of supporting sustainable buildings and practices.

Molly Westbrook is a managing director of Cushman & Wakefield in Salt Lake City. She leads all property management activities in the company’s Salt Lake City market, overseeing responsibility of property management staff and operations.