The Business Case for Sustainability

By Larry Heard, Transwestern CEO and President

Leading commercial real estate companies agree that sustainability is a business issue, though they define and apply it using various approaches. For Transwestern, a leading commercial real estate services firm, our commitment has been to running the most energy efficient, economical and professionally directed buildings in the world. We want to conserve energy and manage costs and do so with outstanding building operations management. In addition to being the right thing to do for our clients, tenants and the communities we serve, we have found that reducing carbon emissions and other environmental impacts while directly impacting the bottom line is cost-effective and practical.
In alignment with that approach, Transwestern developed a sustainability strategy that focuses on energy management as the “first step to green.” Because energy is the largest controllable operating expense in commercial buildings, a small reduction in energy expenses has a significant impact on a building’s bottom line and can greatly enhance the overall value of a property. This comprehensive focus on energy performance is a key part of the value proposition we deliver to our clients and ensures they understand the value of sound energy management.
Transwestern’s history of leading the commercial real estate industry in energy management originated in 1999 during an energy crunch in California. To combat rising energy costs, we began tracking energy use at Transwestern’s managed buildings in Southern California and implementing smart energy management strategies to reduce consumption. As we realized the value this brought to those properties, we expanded our efforts to other Transwestern regions around the country. Those first Southern California buildings used Energy Star to track and evaluate energy performance, and nearly 10 years later, we still use Energy Star resources across over 43 million square feet of our office portfolio.
As a multiple year Energy Star Sustained Excellence winner, Transwestern’s policy is to establish a baseline for each asset using the program’s free benchmarking tool, Portfolio Manager. This allows us to understand energy consumption compared to similar buildings, track operating costs and savings, and set reasonable targets to reduce consumption along with the associated environmental impacts.
Combining Energy Star guidance with our long history of hands-on expertise, Transwestern has developed a series of best practices. These include annual engineering audits of each property, in which we review buildings top to bottom for opportunities to improve performance. We implement low- and no-cost operational adjustments that include green cleaning, recycling, reducing or eliminating weekend operating hours, to be provided only at tenants’ request and a commitment to recycle at least 25 to 30 percent of all construction waste. Our standard practices for capital improvement programs emphasize the most efficient equipment while considering the environmental impact, ownership objectives and payback periods.
Another aspect of our approach has been to actively participate in additional industry initiatives, such as the Building Owners and Managers Association (BOMA) International’s sustainability programs. For example, BOMA issued the 7-Point Challenge in 2007 to reduce the real estate industry’s use of natural resources, dependence on non-renewable energy sources, and waste production. Organizations that commit to the challenge aim to reduce their portfolios’ energy consumption by 30% by working collaboratively with building management, ownership, and tenants. Transwestern readily accepted the BOMA challenge and, thanks to a long history of strategic energy management, has already met the target well before deadline.
What ties all of these efforts together are the results they achieve for our clients—both financial and environmental. As of 2007, more than 200 of Transwestern’s buildings had earned or qualified for the Energy Star label, which recognizes superior energy-efficient buildings across the country.
Results accrue primarily due to optimizing day-to-day operations and maintenance. Transwestern has been able to achieve remarkable energy and cost savings for our clients by first targeting operational strategies with little to no additional cost, and combining those with cost-effective equipment upgrades.
Because operations are so important to successful energy management, Transwestern0’s success is directly correlated to the skill and passion of our team members who operate our buildings daily. Since the energy efficiency of our properties is literally under their control, Transwestern equips building property managers and engineers with the expertise they need to maintain successful energy management programs.
As proof of the value of this comprehensive approach, Transwestern has reduced energy consumption by an average of 20 to 30 percent in properties actively engaged in our sustainability program. Further, these efforts distinguish Transwestern in the marketplace as committed to sustainability through energy efficiency—a provider of enhanced client services that positively impact the bottom line and the environment.

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