Recently, Dustin C. Gellman, CCIM, chief executive officer of GreenPoint Partners in Chicago, and former CCIM President Richard E. Juge, CCIM, SIOR, cofounder of GreenPoint Partners and president of Re/Max Commercial Brokers in Metairie, La., discussed some of the practical concerns of working with sustainable properties. An edited version of this conversation appeared as a sidebar in “Sustainable Momentum,” a feature article in the September/October issue of CIRE.
What exactly is a green building?
Juge: “Greening” a commercial building may include a broad range of initiatives designed to reduce resource consumption and increase cash flow -- including efficiency retrofits, solar installations, and water or waste reduction. When appropriate, Leadership in Energy and Environmental Design and Energy Star certification may follow to provide third-party verification that such measures were enacted.
What buildings offer the best opportunities for “going green?”
Gellman: The strongest candidates typically fit some of the following criteria:
- Located in metro areas with high energy costs and favorable incentives;
- Size is 20,000-plus square feet with a $40,000-plus annual utility spend;
- Best fit use types are office, industrial, hospitality, healthcare, and specific use; retail and multifamily sometimes work;
- Owner-occupied, tenants with gross leases, or single-tenant net-lease;
- Owners or tenants with healthy credit and no financial distress;
- Built prior to 2005 for energy-efficiency retrofits;
- Flat, unobstructed rooftops for solar installations;
- And class A or B properties for LEED certification.
Other factors may include the owner’s position in the asset life cycle (buy, hold, sell), local attitudes toward sustainability, current or pending legislation, eco-conscious tenants, and the decision maker’s access to capital.
What’s
the process when pursuing a sustainability project for an existing building?
Juge: While each situation
is unique, many projects follow a similar path:
1) Analyze Your Properties
- Have an initial assessment.
- Benchmark your property.
- Get an energy audit.
2) Reduce Energy Consumption
- Make operational improvements.
- Perform efficiency retrofits.
3) Generate Renewable Energy
- Install solar, wind, or geothermal.
- Applicable to specific properties in select geographic markets.
4) Get Financing and Incentives
- Secure funding for capital projects.
- Capture financial incentives.
5) Demonstrate Success
- Get LEED and Energy Star certifications.
- Monitor and verify savings.
- Promote progress to internal and external stakeholders.
What role can CCIM members play in the process?
Juge: Clients need solutions –- energy costs are rising, time-sensitive incentives are available, tenants are demanding green space, and governments are introducing new legislation. CCIM members have an opportunity to increase client services and add value by helping clients navigate sustainability initiatives. Green building initiatives are best evaluated on a T-bar and articulated by a trusted adviser, and CCIM members are well-positioned to help clients understand that.
Further, sustainability is complex. Technology, incentives, and laws change quickly. Solutions require multidisciplinary expertise, and clients often don’t have the internal resources to pursue green buildings. CCIM members can offer energy and sustainability services as a means to differentiate from peers, win new business, and ultimately do more transactions.
There are a lot of green building consulting companies out there. What’s unique about GreenPoint Partners?
Gellman: Our company is divided 50-50 between commercial real estate experts and energy engineers. Thus, we can articulate the value proposition to building owners in terms that they’re familiar with -- cash flows. We don’t represent product manufacturers or utilities, so we eliminate the potential bias that is often prominent in the industry. Finally, we take a holistic approach that includes saving energy, water, and waste, as well as making electricity on-site.
To learn more about commercial real estate’s current take on sustainable properties, read “Sustainable Momentum,” in the SeptemberOctober 2011 CIRE. For more information on GreenPoint Partners, visit www.greenpointpartners.com/ccim.
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