TIAA-CREF Sets 10 Percent Energy Reduction Goal for Portfolio
- Mar 24, 2008
Illustrating the dramatic new attitude of commercial real estate owners toward sustainable building practices, TIAA-CREF has reduced energy use in its office portfolio and slashed approximately 37 million pounds from its carbon dioxide emissions. With the overall goal of reducing energy use by 10 percent by 2010, TIAA-CREF has also begun working to improve the energy performance of its 12,000-unit apartment portfolio. “Any time we replace an appliance it will be with an Energy Star appliance,” Nicholas Stolatis, the director of strategic initiatives with TIAA-CREF Global Real Estate, told CPN today. “We will also replace incandescent bulbs with compact fluorescents in both common areas and inside the units. We hope that tenants will notice the savings generated by the compact fluorescents and continue to use them.” According to Ellen Sinreich, president of Green Edge L.L.C. an environmental consulting firm specializing in green buildings, the commercial real estate world has not yet fully embraced sustainability as a way of doing business. “There is a lot of awareness of green, and the industry knows that it is the way of the future,” Sinreich (pictured) told CPN. “But acceptance has been spotty so far.” But the office sector is ahead of the other property types in adopting sustainable practices, continued Sinreich. She attributed the interest of office owners in green buildings to office tenants. “Improved indoor air quality, thermal comfort, natural light and other sustainable features have proven to increase productivity,” she said. “If labor costs are a major part of the cost structure of a tenant–and they are–what is it worth if every employee takes one less sick day every year?” Meanwhile, acceptance of green development in the retail sector has been slower. “Retail real estate owners that pay more to build green features into their buildings probably won’t see a return from increased rents,” Sinreich said. “That will change over time. At some point, it will make economic sense tenants and landlords to share the cost of green retail centers.” Despite the sometimes slow acceptance of tenants, developers are driving the market for green in the belief that it will eventually produce a return on investment. “Sustainable development is one of the core values of Forest City Enterprises,” said Scott Levitan senior vice president of Forest City New East Baltimore Partnership, a joint venture between Forest City and Presidential Partners. “In fact, green is an accepted criteria for development in the development community. It is the way you get projects today. I’m not sure, however, that the market is yet willing to pay higher upfront costs for savings over the long term.” That view is common to owners and developers in all property sectors. In the industrial sector, ProLogis last year became the first real estate company in the world to join the Chicago Climate Exchange, a greenhouse gas emissions reduction and carbon credit-trading program. ProLogis’ green building techniques include recycled and locally sourced construction materials; skylights and clerestory windows that take advantage of natural light; energy efficient lighting systems such as T5 and T8 fluorescent lights; high reflectance roof membranes; exterior landscaping; and even solar and wind power technologies.