Q: What benefits can building owners expect if they implement green operations practices in a building that may not have been designed and constructed to green criteria?
A: I don’t think the private side has been quick to adopt green design and construction strategies, primarily, I believe, due to the fact that there have not been many examples of value created by going green. In private real estate, value is determined when a building is sold. Unfortunately, 99% of LEED-certified buildings are public or owner-occupied. Since these buildings are infrequently sold, we haven’t yet been able to determine if value was actually created. In the last eight months, my company has had two such private buildings sell, one in Atlanta and one in Chicago. The 700,000-square-foot building in Atlanta achieved LEED-CS Gold in 2005 for a $150,000 net premium, while the Chicago project—which was built the same year and obtained the same certification level—had no cost premium. Both were 95% occupied in less than a year and both just sold for record prices per square foot in their respective markets. You can now hear the private real estate train barreling down the tracks.
As for existing buildings, I have been on the road giving presentations on my project called “Greening Your Building Toward the Bottom Line” and found that not only are such techniques good for the environment, but also for business. Operational costs can be significantly reduced and I’m saving $1.50 per square foot annually on a 950,000-square-foot building. As competition exists in the marketplace, I refer to the Green Factor as the tie breaker. When tenants compare my green building to a traditional one across the street and see that rental rates are the same, but that my building is operating 30 – 40 percent better (resulting in lower tenant operating costs and improved health and productivity), it becomes a no-brainer for most clients. We believe we will close eight out of ten such comparable deals.
Q: How has the decision to go green in the Cal/EPA Building and your other properties improved the quality of the workspace and your operating budget?
A: I believe that as you go through the certification process, you just become more aware of how the building operates and, as you gather data constantly, you are always looking for new and improved ways to do things. When I first started at the Cal/EPA Building, a green building to me was one encased in green glass. I didn’t have a clue. But after reading Cal/EPA’s mission statement on reducing the environmental footprint in and around the building, I made it my goal to do just that. I started putting out these green operational procedures and, as the months started going by and financial statements started coming in, I received a surprise. I looked at the numbers and thought something was wrong, as they were much less than I originally budgeted and much less than Downtown Sacramento averages. Well, I checked and double-checked and, to my amazement, it was true. Our operating costs were dropping like a lead weight. I then said to myself, “Oh, my gosh, I’ve found the holy grail of property management! This is not only good for the environment, it’s also good for business.”
Q: Many people hear your incredible success story and say, “Well, that’s California.” In your opinion, what operational changes could be easily implemented across the country to receive the greatest health, environmental and economic returns?
A: What I really hear is that it’s Cal/EPA and that, “of course you could do it there, but it would never work in a multi-tenanted building.” What I tell these folks is that this building is the perfect laboratory to determine what could work in a Class A environment. The low-hanging fruit and the easiest way to make environmental and economic returns is through electricity. There are a multitude of low- and no-cost measures that can be implemented to easily save 20% off energy bills. BOMA has developed six BEEP (BOMA Energy Efficient Program) courses that focus on the fact that you don’t have to undertake huge capital projects to achieve energy efficiency.
Q: Were there struggles with occupants, facility crews or contractors when implementing new ideas and strategies? How were they overcome?
A: Communication is the key—people just need to be educated and informed about what you are trying to accomplish. Change is hard for most people, so you need to sell what you are doing and why you are doing it. After they buy in, it’s over and you have them.
Q: How do you see the facility management field changing in the future with the introduction of tools like LEED for Existing Buildings and the greater prevalence of green housekeeping?
A: I really don’t seeing the field changing much. Facility managers have adapted to the times for years, and will do what is best for the facility and their owners. Once they are educated on the financial benefits that come from green buildings—and many are already—green buildings will just be the way we operate.
Craig Sheehy is director of sustainable development for Thomas Properties Group and currently working on the implementation of a $500 million national Green Building Fund. His building (Joe Serna, Jr. – Cal/EPA Headquarters), a 950,000-square-foot high-rise in Sacramento, has been recognized as one of the most energy-efficient high-rises in the U.S. through the Energy Star program. It was also awarded a Platinum Certification through the U.S. Green Building Council’s LEED-EB program and was the 2004 winner of BOMA International’s TOBY Earth Award. Mr. Sheehy has held numerous positions on regional BOMA boards, committees and programs, and is vice-chair of Governor Schwarzenegger’s Real Estate Industry Leadership Council.