CCIM Institute launches an efficient buildings platform for members.
sustainability industry is at its tipping point. The past decade has been about
educating the market and early adopters embraced sustainability piecemeal, but
the industry has yet to achieve mass-market adoption. Many building owners and
corporate users are just beginning to get their arms around the data to
determine the best avenues for investing in efficiency. But in the next decade,
as energy prices rise, technology matures, data becomes more accessible, and
legislative mandates become more stringent, sustainable buildings will enter
CCIM members with the expertise they need to pursue sustainability, CCIM
Institute is providing a valuable new member benefit: CCIM Green. This
innovative online platform allows users to increase net operating income
have already received log-in information to use CCIM Green. To learn more about
the platform, CIRE magazine spoke with Dustin Gellman, CCIM, CEO of Green Per
Square Foot, which is the engine behind CCIM Green. In this interview, Gellman
talks about the value this new CCIM benefit provides to members and their
What is CCIM Green?
Gellman: CCIM Green is an online program that helps members identify efficiency
retrofits and sustainability projects for commercial real estate properties.
CCIM members can use the tool to profile buildings, get savings
recommendations, and competitively bid projects to a network of more than
250,000 qualified solutions providers. Through a structured procurement
process, members and their clients can achieve lower upfront costs and increase
the internal rate of return on green projects.
unique about the CCIM Green platform?
magic of the platform is the online procurement system. Through competition,
CCIM Green can reduce the client’s initial investment — the project cost — by
20 to 35 percent. The process is transparent, vendor-neutral, and hassle-free.
Clients see every proposal, make their own decisions, and spend minimal time
cutting to the chase. In addition, CCIM Green provides a number of free
features, including energy benchmarking, management dashboards, and
other tools are available within CCIM Green to help facilitate sustainability?
platform features more than 150 detailed recommendations for conserving energy,
water, and waste — which are displayed based on each building’s
characteristics. We track nearly 10,000 government and utility incentives and
match them to buildings by zip code. CCIM Green also syncs with Energy Star
Portfolio Manager, allowing clients to import utility meter data, benchmark
properties, and create an extensive array of reports and dashboards.
what is a green building, anyway?
perspective, green belongs on a T-bar. Efficient buildings consume less energy,
water, and waste than comparable properties — and cost less to operate. By
virtue of having lower operating expenses, these assets have higher NOI and are
therefore worth more.
should CCIM members care about sustainability?
members — regardless of professional specialization — should care about
increasing cash flow from real estate. Sustainability is about improving the
bottom line through efficiency, which should be a priority for any broker,
developer, property manager, or asset manager. In a changing industry that
demands real estate professionals deliver more value, sustainability helps
CCIMs go beyond traditional services and differentiate.
sounds like you’re turning sustainability into a commodity — is that your
short answer is yes. The efficient buildings industry is expensive and
inefficient because no two clients or projects are the same. Add to that a
cluttered landscape of thousands of companies offering “green” products and
services, and you’ve got confusion in the marketplace. Our goal is to help
building owners, managers, and tenants leverage technology to find the right
solutions for the lowest possible cost.
provide an example of a recent project?
months ago, a CCIM member called us about a client who owns a
50,000-square-foot mixed-use building in Chicago. An industrial broker by
specialization, she sold the building to the client in 2006. The property’s
utility expenses were nearly twice the local average; not surprisingly, the
tenants were upset. We performed an on-site inspection and then loaded the
building’s information into the CCIM Green database. From there, we honed in on
two issues: outdated lighting and a highly inefficient HVAC system.
the online procurement system, we bid out the projects. We solicited nine
proposals from various local contractors. For a $30,000 lighting retrofit
project, the client’s out-of-pocket expense was about $6,000 — utility rebates
and competition reduced the upfront cost by 80 percent! The project will pay
for itself in six months, and the owner and tenants will save operating
expenses for years. The HVAC project is now underway, and we expect similar
interesting part of the story is that the CCIM member initiated this project on
a small, unglamorous industrial building owned by two brothers in Chicago. This
project wasn’t about a shiny office tower getting LEED-certified in San
Francisco, but rather an average building pursuing sustainability to keep
tenants happy and improve NOI.
sustainability projects yield the best ROI?
CCIMs practice across such a wide variety of disciplines, it’s difficult to say
“go do X” until we learn a bit more. Generally speaking, within a real estate
portfolio we focus first on older buildings in locations with high energy costs
and strong financial incentives.
CCIM Green offer project financing to boost returns?
partnerships with several financing companies, CCIM Green provides access to
traditional and emerging sources such as Property Assessed Clean Energy, or
PACE, financing and energy service agreements to fund projects.
Green Per Square Foot?
is the technology partner behind CCIM Green. The company was founded 2010 by
several CCIM members, including myself and Richard Juge, CCIM. We are
headquartered in Chicago, about one block from the CCIM Institute.
CCIM members get started with CCIM Green?
CCIM member has free access to the CCIM Green. To get started, visit
www.ccim.com/green. A variety of online help is available, and members can
reach a live person by calling (888) 950-0474 or emailing firstname.lastname@example.org.
measures to lower a building’s environmental impact is a sound investment for
building owners and property managers. Studies by the Institute for Building
Efficiency show that green buildings have higher asset values than their
conventional code-compliant counterparts. This differential in asset value is
proven by 6 to 35 percent higher resale values, 2 to 17 percent higher rental
rates, 30 percent lower operating costs, and 1 to 18 percent higher occupancy
rates. In short, green buildings are worth more.
the major drivers behind the increased asset value of sustainable properties is
lower operating costs. Sustainable buildings are cheaper to operate due to
greater energy efficiency, lower water waste, and reduced maintenance costs.
Energy costs are especially easy and important to manage, since energy alone
can comprise up to 30 percent of a building’s operating cost. Property owners
and managers increase their property asset value by $3 for every $1 invested in
energy efficiency technologies, according to the Environmental Protection
Agency. This figure reflects the net present value of future energy savings
added into the property’s resale value. For example, for a 200,000-square-foot
office building that pays $2 per sf in energy costs, a 10 percent reduction in
energy use adds up to an additional $40,000 in net operating income. At a
capitalization rate of 8 percent, this translates into a $500,000 increase in
asset value, according to Energy Star.
major driver is marketability. As the public becomes more socially and
environmentally conscious, investors and tenants are recognizing the value of the
green building label. Sustainable multifamily buildings feature improved air
quality, lighting, and thermal comfort. And tenants find these features worth
paying for: LEED-certified multifamily buildings command an average rent
premium of almost 25 percent over conventional properties, according to a
recent study published by CoStar.
addition, today’s companies are focused on attracting, retaining, and getting
the most from the best and the brightest employees. Sustainable buildings offer
more comfortable workplaces, leading to increased productivity by the
workforce, resulting in bottom-line benefits for the business. This helps
property managers attract and retain tenants and allows owners to command
higher rents and sales prices.
buildings also have lower risk profiles. Energy efficient buildings are less
affected by rising energy prices. Regulatory risks, such as mandatory
disclosure, building codes, and laws banning inefficient equipment, may
significantly affect rental income and future value of real estate assets.
Proactive building equipment improvements and maintenance keep buildings
running efficiently and reduce the risk of costly emergency repairs, energy
rate hikes, and mandated upgrades.
sustainable building improvements often require a large upfront cost, most
governments and utilities offer tax refunds and incentives to reduce the
initial cost and improve NOI. For example, the state of Maryland offers a
property tax incentive of 10 to 75 percent of taxes owed for three to five
years for high-performance buildings. However, as more property owners take
advantage of these programs, the incentives are reduced or eliminated
altogether. This means that the sooner improvements are made to a building, the
more likely it will qualify for larger financial assistance.
a webinar on how to get the most from CCIM Green at www.ccim.com/green.