Moving to Sodexo…

March 7, 2012

Dear Friends/CRE3 Forum Readers:

I’m writing to inform you that I’ve resigned my position as Executive Vice President with the Sustainability Roundtable, Inc. (SR Inc.) to assume a role as Director of Business Development with Sodexo, Inc. effective March 9th.

As author of SR Inc.’s Blog and the CRE3 Forum for the past two years, I have thoroughly enjoyed publishing posts on a wide range of issues which impact the real estate industry. Through your interest in the trends I’ve highlighted, we’ve far exceeded 10,000 page views with an average readership of 35+ a day.

The move was a difficult decision to make given my firm belief in SR Inc.’s mission and role to move the real estate industry closer to greater sustainability. However, the choice to join Sodexo is a tremendous career opportunity for me and my family. Sodexo is a world leader in “Quality of Daily Life Solutions” as an outsourced facilities-management services provider and foodservice operator with over 120,000 associates in North America, serving 10 million customers. They provide a wide range of services at 6,000+ locations which consist of corporate, health care, long-term-care and retirement centers, schools, college campuses, government entities, and remote sites.

The North American operations, along with its Paris-based parent, have been recognized as:

  • One of “The World’s Most Admired Companies” by FORTUNE
  • One of World’s Top 50 Green Outsourcing Suppliers
  • Ranked number three in the world among outsourcing services companies
  • One of “World’s Most Ethical Companies”

 

I look forward to undertake this fantastic role and will publish my new contact details soon. And, welcome the chance to continue passing along thought leadership of management best practices which impact the real estate industry.

All the best,

Larry Simpson


The Road Ahead in 2012 for the Real Estate Industry in the Drive to Greater Sustainability

December 18, 2011

This past year has been marked by corporate and commercial real estate leaders who have increasingly embrace the principles of sustainability to reduce operating expenses, enhance enterprise value and align real estate/facility portfolios with their organization’s goals of financial performance and environmental excellence.

In 2011, the challenge for executives did not come from their inability to succeed and lead but, from limited capital expenditure resources in the face of the risk and uncertainty of an expanding yet fragile world economy.

2012 will bring its own set of risk and uncertainty but, real estate professionals seem more motivated to develop and implement portfolio-wide sustainability strategies with the confidence that an organized commitment to corporate sustainability better aligns them with top management, investors, customers, talent and regulators. And, that sustainability is a better way to organize and motivate geographically dispersed, functionally divided staff.

In the coming year, leading real estate executives must recognize that individual sustainability initiatives, no matter how successful, are unlikely to be acknowledged at a Board or investor level. Conversely, real estate leaders that aggregate multiple successful sustainability initiatives with immediate payback paired with initiatives that have a longer-term internal rates of return can organize and animate the drive to higher performance throughout a large real estate portfolio that will justify Board, investor and top customer recognition and support.

The key to sustainable real estate strategy success in 2012 will rely on:

  • Leading companies who recognize sustainability as a megatrend that presents strategic imperatives for senior executives, where real estate plays a prominent and sometimes guiding role in enterprise wide sustainability.
  • A more comprehensive, internally branded “sustainability strategy” can be better resourced by the C-suite and the Board, rewarded by investors, supported by employees and lead to higher scores on the rapidly emerging number of indexes that measure sustainability.
  • Energy efficiency and cost savings will remain the core of real estate sustainability strategy, but a growing number of corporate users will see the value of enhanced employee health, well-being, and productivity within workplace environments.
  • Leading real estate executives will establish a compelling long-term vision of sustainable real estate with a strong business case and create effective policies and management structures to institutionalize sustainability.
  • Real estate executives will be identified as “Committed”, “Advanced” or “Leaders” depending on the maturity of their strategy. It will be critical to evaluate and identify improvements through the use of assessment tools such as the two-tiered qualitative “Sustainability Performance Assessment” (SPA), developed by the Sustainability Roundtable, Inc. (SR, Inc.)
  • The SPA reveals that leading companies will invest broadly in portfolio sustainability strategies but most companies still do not adequately invest in the areas of governance or results.

Will you be among the committed, advanced real estate leaders to achieve sustainability success in the coming year and ‘move the needle on the dial’?

Dare to be a pioneer and become the catalyst for change that will drive your company to greater sustainability in 2012.

If you would like to learn more about SR Inc.’s “Strategic Performance Assessment” or how its subscription-based research and management best practice advisory services can help you drive your organization closer to sustainability, visit us at www.sustainround.com or contact SR Inc.’s Larry Simpson, Executive Vice President – Advisory Services at larrysimpson@sustainround.com.

(The author is Larry Simpson, Executive Vice President, Advisory Services, Sustainability Roundtable, Inc. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/aboutst/blog/)


SR Inc. to Convene Corporate/Commercial Real Estate Executives and Drive an Industry Closer to Greater Sustainability

November 12, 2011

The Sustainability Roundtable, Inc. (SR Inc.), the for-profit, shared cost research and consulting firm will bring together corporate/commercial real estate executives and sustainability professionals who represent over 60 member-client organizations at SR Inc.’s Third Annual Summit entitled, “The Change Driving Sustainability” on November 30th and December 1st at the St. Regis Hotel in Washington D.C.

This invitation only two-day event will feature: sustainability excellence award winners; presentations and case studies of SR Inc.’s 2011 Research Program; panel discussions with Federal agency representatives; and, facilitated sessions to develop SR Inc.’s 2012 Research Program.

Management Best Practice Sessions will include:

Portfolio-wide Sustainability Strategies: What strategies do Real Estate Executives use to resource and create sustainable value. (Includes Innovative Finance for Energy Efficiency)

Benchmarking Sustainability: What sustainability KPIs should Leaders adopt and what are the relevant performance benchmarks.

Sustainable Leased Space: How Leaders move to more sustainable leased space? How Tenants and Landlords systematically implement green leases and what provisions in RFPs, LOIs and Leases are used.

Alternative Workplace Strategies: What AWS strategies are successfully adopted to increase productivity and how can landlord’s best respond.

Working with the Federal Government: What are the best sustainability resources available within the Federal Government and how can Real Estate Executives partner with them.

The collaboration of SR Inc.’s member-clients supported by SR Inc.’s analysts, researchers, consultants and advisors is rapidly driving the real estate industry toward greater sustainability with breakthrough management best practices about ‘what works’ to apply the principles of sustainable real estate strategies across a portfolio that reduce operating expenses/occupancy costs; enhance enterprise/asset value; and align with organizations’ commitment to the environment.

If you would like to learn more about SR Inc.’s Annual Summit III or how SR Inc.’s resources and implementation guidance could help you drive your organization closer to sustainability, contact SR Inc.’s Larry Simpson, Executive Vice President – Advisory Services at larrysimpson@sustainround.com.

(The author is Larry Simpson, Executive Vice President, Advisory Services, Sustainability Roundtable, Inc. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/aboutst/blog/)

 


“Green Leasing” Tools Evolve from Infancy to Maturity in the Move to Greater Sustainability

October 23, 2011

The movement to greater sustainability in leased space took an important step forward following a recent Sustainability Roundtable, Inc. (SR Inc.) Member-Client webinar. The event presented research, case studies and introduced a newly developed “green leasing” toolkit that will enable corporate occupiers and owners/investors to achieve sustainable excellence.

The increased adoption of “green leases” is playing a transformational role to streamline the greening process. One of the centerpieces of the SR Inc. webinar detailed a more sustainable leasing strategy with seven fundamental preferences in decision making:

  1. Develop a portfolio-wide optimization strategy
  2. Integrate alternative workplace strategies
  3. Seek space in transportation adjacent existing buildings
  4. Weigh renewal options
  5. Weigh long-term lease options
  6. Seek buildings with a third-party certified commitment to sustainability
  7. Collaborate with landlords and tenants to advance greater sustainability

The most important aspect of the webinar was the introduction of a “Green Leasing” toolkit. These tools were introduced in DRAFT form pending SR Inc. Member-Client input/comment and are designed to be used by corporate directors of real estate and portfolio managers in the final phase of sustainable corporate real estate selection – the green lease itself. The tools within the toolkit included:

Site Selection Tool – outlines the steps to select a landlord with a commitment to sustainability and a site that has already achieved LEED, ENERGY STAR certification or a willingness to achieve sustainability certification.

Request for Proposal Tool – identifies tenant requirements for sustainability practices and distinguishes which green terms may be structured into the lease documents.

Letter of Intent Tool – highlights a tenant’s key green or sustainable lease issues and includes which green terms may be structured into the final lease document.

In addition to the green leasing guidance toolkit, SR Inc.’s breakthrough tools offer sample lease language for: 

  • LEED or Other Green Building Certification
  • Base Rent, Operating, and Capital Expenses
  • Utility Consumption and Metering
  • Data Collection and Information Sharing
  • Waste Stream Management, Recycling and Janitorial Services
  • Indoor Environmental Quality
  • Parking and Alternative Transportation
  • Environmentally Preferable Purchasing Policy
  • Construction Obligations and Tenant Improvements
  • Special Remedies for Violation of Green Lease Provisions

Overall, the toolkit emphasizes that a successful green lease is the result of a comprehensive negotiation process, in which sustainability practices are deliberately embedded in each phase of the lease lifecycle. The lease should reflect and memorialize the sustainability goals and obligations of both landlord and tenant as negotiated through prior documents.

The tools were developed in conjunction with SR Inc.’s Full Report – “More Sustainable Leased Space,” the “Global Sustainable Facilities Guidebook” for corporate occupiers and the “Global Guidebook on Sustainable Properties” for owners/investors.

In addition to the presentation of the SR Inc.’s newly developed toolkit there was a highly interactive discussion with comments from corporate executives at Apollo Group, AutoDesk, CapitalOne, Cisco, Intuit, McKesson, Mitre and Symantec as well as owner/occupier, Brandywine Realty Trust.

The movement to greater sustainability is evolving from its infancy with the leadership of innovative corporate and commercial real estate executives. And, now with tools developed by SR Inc. sustainability in leased space is becoming more cost effective and much easier to achieve.

If you would like to download the program presentation and an Executive Summary of “More Sustainable Leased Space” visit www.sustainround.com. To learn how SR Inc. can help organizations achieve greater sustainability portfolio-wide, please contact Larry Simpson, SR Inc.’s Executive Vice President of Advisory Services at larrysimpson@sustainround.com.

(The author is Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/aboutst/blog/)


“Are Your Buildings’ Indoor Air Quality Impacting Workforce Productivity?”

September 28, 2011

They just might be…

Various factors over the past decade have led to greater adoption of strategies to improve indoor air quality (IAQ) in office buildings as part of an overall sustainability portfolio program.

A growing body of scientific knowledge has raised awareness about the increased health risks for employees which lead to potentially significant liabilities, increased absenteeism, and reduced productivity.

New regulations and standards to improve IAQ have prompted greater adoption of IAQ strategies by leading companies, as have green building certification criteria that require addressing IEQ in order to obtain certification. The emergence of advanced green technologies, no- and low-emission green cleaning products, PVC-free carpet and water-based paints, have enabled leading companies to implement IAQ source-control strategies at a reduced cost with significant returns on investment.

At a recent client-meeting of the Sustainability Roundtable, Inc. (SR Inc.), Georgia Tech’s Dr. Charlene Bayer, who leads the ‘Health in Buildings Roundtable’, and SR Inc.’s Michael Gresty presented findings of their latest research on, “Managing Indoor Quality” which identified the link between IAQ and worker productivity. The highlights of the published research found:

•       Leading corporate users pursue IAQ management as part of their portfolio-wide sustainability strategy to reduce employee absenteeism and health care costs, improve productivity, reduce liability and regulatory risk, and improve brand and reputation.

•       Commercial real estate owners address IAQ management to improve competitiveness and ability to attract and retain tenants, increase property values, and reduce liability and regulatory risk.

•       Cost-benefit analysis has demonstrated the significant paybacks from improvements in building design, operation, and maintenance that address IAQ. Such improvements “may often exceed the costs by a factor of ten or more because worker salaries and benefits greatly exceed the costs to provide and operate buildings.”

•       Leading executives implement source reduction as the primary strategy for improved IAQ, establish policies for the use of ‘green’ construction materials in renovations and upgrades (e.g., carpets, paints, and furniture), utilize green cleaning chemicals and ban smoking inside and near buildings.

•       Leaders recognize the benefits of increased ventilation to dilute indoor contaminants and implement ventilation rates above the code requirements. Demand controlled ventilation, natural ventilation, mixed-mode ventilation, inclusion of enhanced filtration (both particulate and gas-phase), operational improvements and preventive maintenance are all proven approaches to reduce both energy costs and health complaints.

•       Leading companies monitor key indoor air contaminants like CO, CO2, ozone, particulate matter, and VOCs, and go beyond the mandatory and guideline limits to improve IAQ.

The research features case studies from Steelcase’s Corporate Development Center in Michigan; the Ridgehaven Office Building in San Diego, CA; the Philip Merrill Environmental Center in Annapolis MD; Royal Bank Building in Winnipeg, Canada; and, Georgia Tech’s campus buildings in Atlanta GA.

The research also provided recommended approaches to manage IAQ and improve indoor air quality in new or existing buildings that included:

  1. Source reduction
  2. Implement humidity control
  3. Increase fresh air ventilation rate and overall air distribution in the space
  4. Use enhanced filtration systems
  5. Improved building maintenance
  6. Behavior modification, occupant education

SR Inc.’s research demonstrates the importance to address indoor air quality as part of an overall sustainability strategy that is designed to create a healthier workplace for your company’s most valuable resource, your workforce.

If you would like to receive an Executive Summary of the research, “Managing Indoor Air Quality” please contact SR Inc.’s Larry Simpson, Executive Vice President, Advisory Services at larrysimpson@sustainround.com or call 508-946-4750.

(The author is Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/aboutst/blog/)


SR Inc. Launches New Website with Resources to Help Organizations Move to Greater Sustainability

September 13, 2011

The Sustainability Roundtable, Inc. (SR Inc.) launched its new website on August 28th along with new corporate branding that includes resources for corporate and commercial real estate executives to help their organizations move to greater sustainability.

The site, www.sustainround.com, features: an overview of SR Inc.’s service offerings; select client references and profiles; career opportunities; link to SR Inc.’s blog; and a compendium of research, advisories and briefings available in SR Inc.’s “Digital Library” that clients can use to accelerate their ability to achieve high performance of their owned and leased facilities.

Visitors are encouraged to download the company Newsletters and complimentary, representative examples of research which feature: “More Sustainable Leased Space,” “Integrated Alternative Workplace Strategies,” and “Advanced Energy Management Systems.”

SR Inc. is a shared-cost research and consulting firm that promotes the use of industry best practices about ‘what works’ to apply the principles of a sustainability real estate strategy to reduce operating expenses, enhance enterprise/asset value and align with their organization’s commitment to environmental goals.

To learn more about how SR Inc. is assisting “Leaders Creating Value” and how their resources can help you, help your organization move to greater sustainability, please feel free visit the new site, www.sustainround.com, and contact Larry Simpson, Executive Vice President of Advisory Services at larrysimpson@sustainround.com or 508-946-4750.

(The author is Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/aboutst/blog/)


It’s not Rocket Science or Brain Surgery, its Corporate Real Estate Budgeting for Greater Sustainable Outcomes

August 22, 2011

Summertime, right? Time for vacation with family and to regroup before the blur of activity in the post-Labor Day fourth quarter? Wrong.

For most of you, the month of August is about hungering down in a conference room converted, “war room” with co-workers crunching numbers to prepare your real estate budget for departmental and corporate approval.

As you know, the budgeting season can be a tedious process to track down information, project internal charge-back costs to offset expenses, calculate macro interest rates, collect data from various systems and sources, and project/reconcile budget-to-actuals.

But, you don’t have to go visit a rocket scientist or ask a brain surgeon to know we are still amidst difficult financial times for most companies and budgeting is getting more and more difficult. The challenges you face are how to reduce operating expenses and enhance asset/enterprise value. But, now you’re being asked more and more to align the real estate portfolio with corporate environmental goals while achieving an acceptable rate of return.

How are you going to do find monies in your budget to create a sustainability strategy with so much less? The Sustainability Roundtable, Inc. (SR Inc.) and their most recent research just might have some of the answers.

SR Inc., in their report, “Allocating Resources for Sustainable Outcomes” found that:

  • Sustainability upgrades can have a substantial impact on the enterprise bottom-line to reduce operating and maintenance costs, mitigate carbon impact, improve employee productivity and increase asset value.
  • Capital allocations to improve indoor environmental quality can be more cost-effective and create greater enterprise value than energy conservation and efficiency investments.
  • Determining the relevant metrics and qualifying some sustainability key performance indicators (KPI) is difficult but methods are emerging measure intangible benefits.
  • Base financial models such as simple payback and ROI are inadequate to assess the real costs and benefits of most sustainability projects.
  • Energy performance can be benchmarked, monitored and evaluated, and therefore energy efficiency upgrades are high-priority for innovative finance programs.

But, you don’t own all of your facilities and have little control on the pass through expenses from your landlords in your current lease. SR Inc. has conducted some breakthrough research in a report entitled, “More Sustainable Leased Space,” where the adoption of ‘green lease’ language and other measures can help you achieve greater sustainability and reduce occupancy expenses. The research found:

  • To overcome conflicting priorities and the barriers that hinder the move to more sustainable leased space, leading companies develop a strong business case aligned with corporate goals, conduct total lifecycle accounting, adopt “green” leases, and gather data for sustainability KPIs to benchmark internally and externally.
  • Many corporate tenants pursue LEED-CI or BREEAM interiors to reinforce credibility, provide brand recognition and engage employees/clients. To avoid administrative burdens of formal certification but still obtain the benefits, some choose to ‘design to LEED-CI’ but not certify.
  • To achieve cost-effective sustainable leased space and certification, CRE leaders give preference to those buildings that are ENERGY STAR rated or whose landlord has demonstrated a commitment to sustainability.

SR Inc.’s Vice President of Research and Consulting, Irina Mladenova claims, “overestimating certification costs and setting unrealistically high hurdle rates based on a simple payback analysis are typically the biggest barriers in the move towards more sustainable leased space. When real estate executives hire consultants to lower the documentation and filing cost but do not overpay them and when a life-cycle cost analysis rather than a simple payback analysis is used to establish hurdle rates, the additional costs to achieving green building certification is in fact far less (0-2%) than many real estate professionals assume. And, there is an increasing recognition that green buildings result in significant, yet hard to quantify, health and productivity benefits.”

The challenge to find monies in your budget for sustainable real estate is no longer a cost benefit trade-off. The budgeting process may be arduous but, there is clear evidence that you can achieve a more sustainable real estate portfolio by allocating resources where they will have the greatest impact and implement initiatives that are more about changing behavior than being capital intensive. And, besides, budgeting for sustainable outcomes is a heck of lot easier than rocket science and brain surgery.

If you would like to learn more about how you can create a budget with greater sustainable outcomes you can download SR Inc.’s research: “More Sustainable Leased Space,” (http://sustainround.com/research/leasedSpace.php);  and for a copy of “Allocating Resources for Sustainable Outcomes” please contact Larry Simpson, EVP of Advisory Services at larrysimpson@sustainround.com.

(The author is Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc.  who can be reached at larrysimpson@sustainround.com. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/forum/ )