Benchmarking Corporate Real Estate Data to Drive Sustainability Excellence: “You Can’t Manage What You Can’t Measure”

February 24, 2011

Benchmarking is essential to create a real estate strategy that ultimately can drive sustainability excellence…to get where you want to go, you have to know where you are starting from.

The primary purpose of benchmarking corporate real estate data is to discover areas of underperformance (both relative to relative to leased and owned assets within your portfolio as well as relative to industry standard by building type, industry, and geography), investigate the reasons for this, set goals, and develop improvement initiatives to achieve those goals.

Benchmarking is not usually a one-time exercise. Regular benchmarking on an annual basis is key to achieving goals and continuous improvement.

Throughout the benchmarking process you have to keep in mind the axiom, “you can’t manage what you can’t measure,” and that the purpose is not measurement for it’s own sake, but measurement to manage for greater sustainability.

In a monthly webinar by the Sustainability Roundtable, Inc. (SR Inc.) in October 2010 entitled, “KPIs and Benchmarking Portfolio-wide” we cited sustainability key performance indicators (KPIs) in the most common categories, include:

Operations (energy, water, waste, and space utilization)

Financial (capital investments, savings generated, operational investment of savings, return requirements/criteria)

Environment (indoor air quality, GHG emissions, and land use)

People (sustainability expertise, occupant engagement, alternative workplace options & utilization and occupant absenteeism)

The fundamental barrier to benchmarking is the difficulty to obtain reliable data, both for the assets to be benchmarked and for the benchmarks to be used. The critical steps to start an effective benchmarking program for real estate sustainability are:

Establish KPIs, or review them if these exist already, to evaluate whether or not you’re making progress across key impact areas. If not, select the appropriate common KPIs relevant to the company’s specific business model, product, and needs.

Determine whether the data for these KPIs exist within the enterprise, and if not, implement a longitudinal measurement and collection program to gather and track data.

Create a data repository (not spreadsheets) to collect and analyze the data, determine its completeness and reliability, and assure data quality.

Select the set(s) of external benchmarking data you will use, and ensure that these will be updated and available in the future.

Analyze the data and compare them to the benchmark set.

Publish the results to the teams responsible for data collection, and for facility and asset management. This establishes a baseline.

Set meaningful short, medium and long-term improvement goals, to position your assets and your portfolio where you want them to be.

Some of the more commonly used metrics are:

Energy use (all types, gigajoules per square foot per year)

Water use (gallons per square foot per year)

Waste to landfill (pounds per square foot per year)

Carbon dioxide equivalent, CO2e (pounds per square foot per year)

Air quality (particulates and other pollutants, parts per million)

Some available resources for benchmarking information can be found at:

BOMA’s Experience Exchange Report (EER) service – $279 Per Year

CoreNet Global Real Estate Benchmarking (REB) Portal – $175-275/Building

ENERGY STAR Portfolio Manager – FREE

Climate Disclosure Project – Cost Varies by Level of Inquiry

Corporate Global Reporting Initiative (GRI) Reports – FREE

Michael Gresty, SR Inc.’s Executive Vice President of Research and Consulting, notes that, “each one of the benchmarking steps are essential to create a process that empowers executives and staff with actionable information to support decision-making. Doing this is difficult—if it were easy, everyone would have done it already—but essential to the effective management of real estate assets for greater sustainability. Benchmarking is not an end in itself, but without it, it is impossible for managers to set robust goals to measure progress.”

Corporate real estate professionals who are serious about creating sustainable enterprise value from real estate assets ensure that they have a meaningful benchmarking program in place, and are committed to it long-term because, “you can’t manage what you can’t measure.”

Larry Simpson

Executive Vice President

Sustainability Roundtable, Inc.


(The post was originally published in the Sustainability Roundtable’s blog found at and was republished with permission by the author, Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc.)


Creating Enterprise Value through Sustainable Real Estate Strategies

February 3, 2011

Sustainable corporate real estate strategies:

– reduce operational and occupancy costs through energy efficiency and space optimization, AND

– avoid customer, employee, environmental and regulatory risk, AND

– align portfolio management with an organization’s overall objectives.

Sustainable development, which has been defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs,” is a policy objective and global megatrend that companies must align with to create enterprise value.

The hallmark of corporate sustainability excellence is inclusion in the Dow Jones Sustainability Index (DJSI). The DJSI recognizes that “corporate sustainability is attractive to investors because it aims to increase long-term shareholder value. Since corporate sustainability performance can now be financially quantified, they now have an investable corporate sustainability concept. Second, sustainability leaders are increasingly expected to show superior performance and favorable risk/return profiles. A growing number of investors are convinced that sustainability is a catalyst for enlightened and disciplined management, and thus, a crucial success factor.”

DJSI recognition does not necessarily require a sustainable corporate real estate strategy, but those organizations that proactively incorporate the principles of sustainability into managing their portfolio of leased and owned facilities can make significant contributions to their organization’s overall enhanced value.

The challenge for the corporate real estate and facilities professional is made a bit easier when senior management fully embraces the principles of sustainability and is willing to make the necessary investment that achieves an acceptable internal rate of return. 

The way real estate strategies play a major role to create enterprise value is best highlighted in the Sustainability Roundtable, Inc.’s (SR Inc.) “2010 Corporate Real Estate Management Best Practice Guidebook” which reports the following best practices they originally researched from leading corporations:

  • Portfolio-wide sustainable real estate strategy is an essential component of a corporate response to the sustainability megatrend.
  • Leading real estate executives align with corporate strategy to establish a vision of sustainable real estate; implement effective governance; guidance; short-, medium- and long- term goals; and demand accountability for results.
  • Executives can create sustainable efficiency and value by developing and implementing portfolio-wide initiatives to improve portfolio performance and increase asset value.

Going forward, innovative real estate professionals are being increasingly recognized for taking the lead to exceed goals. To be successful they must implement proven sustainable real estate strategies that: compliment the corporate vision; anticipate long-term environmental impact; meet shareholder demand for financial returns; foster customer loyalty for company products and services; set high standards for the corporate code of conduct; and, maintain employee affinity and job satisfaction.

Michael Gresty, SR Inc’s EVP of Research and Consulting, observes that “today, the corporate real estate function is often by default the internal champion of sustainability initiatives. CRE teams can now do more to secure C-suite buy-in that enables them to maximize value creation rather than simply minimize costs. CRE is experiencing a metamorphosis to become a new source of value and risk management.”

Sustainability is no longer just “a good idea” or “the right thing to do,” sustainability is now an investable strategy as sustainable real estate portfolio management has become an important element in creating benefits for companies and their investors. As the sustainable enterprise value creation dynamic expands, it will have an even more profound effect on improving individual and corporate financial performance, the global economy, and environmental stewardship.

(The post was originally published in the Sustainability Roundtable’s blog found at and was republished with permission by the author, Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc.)