The Practical Side of Sustainability
The reality of the “green” or sustainable building movement, at least in the world of commercial real estate, is that it is relatively very small and not growing at a significant rate.
The U.S. Green Building Council estimates that 2% of all new building construction projects receive LEED certification. Existing buildings greatly outnumber newly-constructed ones, especially given the current economic market. There are many good reasons to go green, but in the real world – the one in which we all live – there are significant practical reasons why building sustainability is stalling.
Recently, we met with Scott Renaud, a principal with CNL Commercial Real Estate in Orlando, to discuss why sustainability has not caught on faster in the world of commercial leasing, particularly office buildings. Renaud’s company currently manages more than 2.5 million square feet of leasable space, and they employ some of the absolute best tenant brokers in the business. In short, Scott knows what he is talking about.
When asked, “Why is it taking so long for ‘green’ to catch on in the commercial office context?”, Renaud offers this answer: “Most building owners do not, for one reason or another, maintain the “sustainability” of their sustainable buildings.”
According to Renaud, most multi-floor buildings have a building automation system (“BAS”) which is designed to manage, control and/or monitor hundreds of details about the building, including energy usage, lighting, air conditioning, heating, and security. These BAS products have been around for more than 20 years. A few example BAS manufacturers include Trane, Siemens and Cisco Systems (and there are many more). Renaud maintains that, when used properly, the BAS creates enormous potential for energy cost savings. But Renaud, himself an experienced building manager, can cite many examples where the potential for substantial savings is left on the table by building owners whose assets are integrated with a BAS. Why?
The reason relates to the evolution of technology in real estate. Over the years, more and more technology has found its way into the commercial real estate environment, and that technology has become incredibly complicated. In fact, Renaud believes that the typical BAS is best operated by someone who has computer programming experience in addition to building management experience.
Notwithstanding the increased technology, simple economic pressures prevent owners from hiring higher-paid building managers who have the sophistication and training to properly operate that technology. The result is a huge disconnect between the requirements of the BAS and the qualifications of a typical building manager, who simply doesn’t know how to optimally operate the system. Nevermind that the owner (read “institutional investor”) hasn’t figured out the economic advantage of paying more money for a more qualified building manager, resulting in energy savings that would more than offset the additional salary cost.
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