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Better Building Initiative BBI.


Energy efficiency has long been a primary concern for property managers. The focus on generating savings is getting a further boost from President Obama's Better Building Initiative (BBI).

Introduced in February 2011, the BBI challenges both public and private organizations to make their buildings 20 percent more energy efficient by 2020. The program picked up momentum last December when 20 companies and public entities committed to participating in the Better Buildings Challenge. Major corporations such as CBRE, ProLogis and Transwestern signed on as partners in the challenge, agreeing to reduce energy costs 20 percent by 2020, but also to share their practices and financial results of doing so.

USAA Real Estate Company has committed its 49 million square foot portfolio of office, industrial, mixed-use and hotel properties to the challenge.

"We wanted to highlight our best practices and also learn from best practices from other partners as well," said Brenna Walraven, CPM, RPA, a managing director at USAA Real Estate in San Antonio. "Not to say that these are rocket science ideas, but if they can help another firm or another organization do better, then that is doing the right thing in giving something back to our industry and also to our country"


One of the key advantages of the BBI is that it refocuses attention on energy efficient tools, resources, technologies and practices--even among those firms that have made sustainability a priority.

"Prior to the BBI coming out, we already had a large focus on sustainability and energy efficiency," says Jamie Weber, CPM, LEED AP, RPA, senior property manager at Colliers International in Washington, D.C. Colliers International had created a national sustainability team that provides local support to all of its markets with ideas on green initiatives as well as a sustainability designation that Colliers employees can obtain through its Colliers University program.

While sustainable practices have become standard at many large real estate firms, not every business or property owner is focused on energy reduction.

"This is a further push to help owners and managers to perhaps take some extra steps that they haven't taken before," adds Weber.

One question for those participating in the program is whether that 20 percent standard is a realistic and achievable goal. USAA's standard commitment is to save 5 percent per year.

"I absolutely believe the goal of saving 20 percent by 2020 is achievable, even for big companies that are already doing a lot," said Walraven. One factor that will make that goal more obtainable is the continual improvement of technology related to energy materials, equipment and systems. In addition, more and more property managers, employees and tenants are becoming involved.

Jones Lang LaSalle has committed 98 million square feet of properties that it manages to the BBI Challenge. Overall, the response from property managers has been positive.

"But, with so many buildings under management it's no surprise that we're seeing a range of responses," said Richard Veith, CPM, a vice president at Jones Lang La-Salle in Pittsburgh. Many of Jones Lang LaSalle's property managers were focused on improving energy performance well before BBI was introduced.

Some property managers have already done so much with their properties that an additional 20 percent improvement does not seem attainable, notes Veith. But those buildings that have yet to make energy savings a priority actually represent the greatest opportunity for improvements if managers can convince clients that any capital improvements will produce a good return on investment.


The BBI is trying to drive home the point with owners, managers and tenants that energy efficiency makes good financial sense. According to a White House statement, commercial buildings consumed about 20 percent of all energy used by the U.S. economy in 2010. A 20 percent reduction across the board would produce an estimated $40 billion in savings.

"Owners are always looking for cost-effective ways to reduce energy because, if you do, obviously there is a savings there," said Carolyn Perrigo, CPM, CSM, a senior vice president at Transwestern in southern California. Transwestern has enrolled 442 office buildings totaling some 78 million square feet of managed properties in the challenge. In addition, Transwestern hopes to exceed the challenge goal by achieving an even higher 25 percent reduction in energy use by 2020.

The BBI challenges property managers who have been focused on energy efficiency to fine-tune and embrace practices to find additional savings, notes Perrigo. Managers need to stay focused on energy efficiency, as well as emerging technologies that can boost savings in lighting, mechanical,. boiler efficiencies, roofing and other equipment.



During the 1990s, managers did a lot of lighting retrofits. Back then, the standard lamp was 40 watts. Since then, additional improvements produced a 32-watt lamp and now a 25-watt lamp--innovation that has led to a 40 percent savings. If a manager only did the first round of retrofits and didn't keep up with the evolving standards, money and energy savings are waiting to be claimed. "We need to keep up with the technology as the technology progresses," Perrigo added.

Property managers that might have missed out on the savings from the first wave of innovation have reason to embrace the BBI, participants of the program have agreed to share data in order to establish quantifiable results. Firms are reporting results and case studies with the help of tools such as the ENERGY STAR Portfolio Manager benchmarking tool.

As part of its BBI Challenge participation, USAA has shared a case study involving a retrofit of a two-building office complex in Fort Lauderdale, which detailed the steps and savings at 350 and 450 Las Olas Centre from lighting retrofits, a Level II energy audit, water retro and new irrigation strategies. Overall, the various measures put into place at the property ended up saving nearly $1.2 million in operating costs. At almost 470,000 square feet, the 14 percent reduction is roughly a savings of $2.48 per square foot.

Jones Lang LaSalle has its entire U.S. portfolio enrolled in ENERGY STAR Portfolio Manager, allowing the company to track performance improvements very easily in conjunction with its own Portfolio Energy and Environment Reporting System (PEERS), which is designed for large corporate portfolios.

"A lot of the improvements we expect to achieve in the coming years would happen with or without the Better Buildings Challenge," said Veith. "But our commitment to the challenge was to put a plan in front of as many owners as possible regarding how they can improve energy performance and financial performance. Some of those plans will result in actions taken that may not have happened otherwise. So it's definitely our goal to use the challenge as a call to action for owners and for our property managers."



BBI is hoping to spark more participation with added financial incentives. So far, the government has earmarked $20 billion for energy efficiency improvements to government and residential buildings as part of the American Reinvestment and Recovery Act (ARRA). For example, the ARRA provided the General Services Administration with $5.5 billion to improve the energy performance of existing buildings and to jumpstart a new generation of energy efficient buildings.

In addition, President Obama is calling on Congress to alter the current tax deduction for commercial building upgrades, transforming the current deduction to a credit that will encourage building owners and real estate investment trusts to retrofit their properties.

The administration is also working to make financing more widely available, encouraging property owners to take advantage of recently increased loan size limits to promote new energy efficiency retrofit loans for small businesses. The president's budget will also propose a new pilot program through the Department of Energy to guarantee loans for energy efficiency upgrades at hospitals, schools and other commercial buildings.

Currently, the BBI does make tax incentives available to owners/properties that achieve a 50 percent reduction in energy costs.

"Since many properties have already implemented energy management improvements because it made good business sense, the current tax incentives based on reducing energy costs by 50 percent are unrealistic," said Veith."In order for the BBI to provide the impetus for the next generation of energy efficiency upgrades, tax incentives based on incremental improvements to energy cost reductions needs to be pursued."

If more attractive tax incentives materialize, as many hope, it could spark more energy retrofits across the commercial real estate sector. Certainly, added financial incentives will motivate some owners to step-up energy efficient efforts, adds Weber. "The big push with BBI is if the incentives and tax credits are obtainable, it will help owners take that next step that maybe they couldn't do financially before."

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Author:Mattson-Teig, Beth
Publication:Journal of Property Management
Geographic Code:1USA
Date:Jul 1, 2012
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