Building & Facilities Operations

I’ve been told, “If you’re looking for answers, they’re not going to just fall into your lap!” Well, if you post the right question, they just may fall into your LinkedIn lap. Following a Building Engines webinar on LEED EBOM certification, I wanted to open up the discussion to other property and energy management and professionals.

LinkedIn, specifically the BOMA International Group, proved to be a fruitful forum for my question: What are some tips around the greening of existing buildings? Here are some of the discussion’s responses:

Since lighting represents about 30% of our energy bill upgrading to LED lighting saved us from 74 – 90%! We have tried several different LED lamps, however, we found that the ones offered at www.lightingatlanta.org are some of the best available.

You could also add motion sensors and wire them with the light switches so after 5 minutes of no movement, the lights will automatically go off.

There are many low-cost/no-cost measures you can take to green your facilities: (1) adjusting thermostats for seasonal comfort and programming in night set-backs; (2) reducing ventilation to unoccupied spaces and for nighttime operation; (3) replacing air handler filters, and (4) other basic O&M practices to tune up energy equipment performance

You can go further by periodically conducting Level 1 audits and follow-up retro-commissioning on key systems such as the controls or boilers/chillers/air handlers.

Relative to HVAC system energy savings, if the building’s systems utilize a building automation system, a comprehensive review of the sequences of operation in comparison to actual setpoints and schedules is a great method to save operational dollars and energy. Often, over many years, changes are made by operators and unintentionally the intended energy savings design features of the HVAC systems are lost.

The building envelope is a good place to start to realize energy savings. Before upgrading HVAC equipment, it makes sense to seal up energy leaks at the roof and facade, to avoid over-spending on heating or cooling.

Do not source a lighting solution which uses products available only from one manufacturing source.

Reducing your outdoor watering costs. Most landscapers do not know how to properly set the sprinkler systems, and often just defer to over watering, since you will only notice on your water bill.

Make sure that any intelligent lighting solution is native to the building management/automation system so there is seamless access to any available data from the lamps at any time. Further this allows you to easily share information between lighting and other systems for even more potential efficiency savings.

Read more on using lighting to conserve energy!

Q: Why do technological things never work?

A: Because there’s “no logic” in it!

Buhdum Che! OK, so bad joke, and an even worse perspective to adopt when it comes to property and tenant management. Technolgoical tools have been essential in the drive for efficiency and business process re-engineering in property management companies. Owners and operators today face more management demands than ever, and are often asked to accomplish more with fewer resources.

The best management firms have responded by accelerating their adoption of information collection and reporting tools through Software as a Service (SaaS) technologies. These SaaSy companies typically see improved service levels, tenant retention, asset protection and risk management, but there are also some less advertised perks:

Differentiation for Your Company

Top companies see the effective use of technology as a way to create differentiation despite operating in a tenant-perceived sea of sameness. Ultimately, they see it making them more profitable.

No Reliance on In-House Techies

At the same time, technology advances have made sophisticated technologies accessible to property and tenant management organizations of all sizes. The Software as a Service business and technology model has eliminated the need for in-house technology staff to acquire, deploy and maintain online information and operation systems.

Get Lost, Costs!

The SaaS model has dramatically lowered both initial costs and total application costs. Applications are easily aligned to each organization’s workflow, or introduce and reinforce industry best-practices. Software with intuitive interface design can remove user barriers and the need for intensive training.

Read here for The Keys to Enterprise Level Software Acceptance!

We all had to “fall back” this past weekend (unless you’re one of the lucky ones in Hawaii), but we don’t need to fall back on our old lighting habits. With the end of Daylight Savings Time, comes the end of low electricity bills. Short days mean a long ways to go for your facility’s lighting.

This concept is nothing new. Benjamin Franklin presciently grappled with the idea that day time = money in his essay “An Economical Project for Diminishing the Cost of Light.” As the face of the $100 bill, Ben Franklin knew how to be green and had money covered.

Today, roughly a third of your utility billing goes towards lighting. How can you conserve energy? Here are a few tips:

Lighten Up!

Use lighter colors on walls and ceilings to maximize the reflection and effect of light sources. Painted walls, along with fabrics and perforated metal, should be strategically placed to offset direct sunlight. Glare distracts site occupants and is the #1 obstructor of daylighting systems.

Here Comes the Sun

Use a lighting system that compliments and supplements natural lighting for energy use cuts, increased worker productivity, and happy tenants. Make sure you are fully utilizing skylights, clerestory windows, conventional glazing, reflective materials, and light pipes.

LED It Shine

Daylight is the most efficient lighting, but after that there’s a variety of light sources each with varying levels of efficiency, color quality, and service life.

Light-Emitting Diodes, LEDs, are a newer light source that can save 50-90% in energy costs. Combined with a reflector upgrade or retrofit, the glare associated with LEDs and the number of fixtures required can be reduced. Tax credits and power company rebates are another advantage of LEDs over fluorescent lighting.

For those who are set on fluorescent, replace T12 lighting systems with energy-efficient T8 lighting and electronic ballasts.

For security and parking lot lighting, high pressure sodium fixtures have the advantage over metal halide, mercury vapor, fluorescent, and incandescent fixtures.

Gain Control

Use lighting controls to adjust electric lights at appropriate times. Use automatic controls that sense ambient daylight to ensure that electric lighting is minimized during strong daylight.

Dimmer switches in stairwells, copy rooms, restrooms, and perimeter lighting fixtures  can trim energy use. For exterior lighting and some interior lighting, time clocks or photoelectric cells can be installed.

Are you seeing the light yet?

Read more on energy management through lighting improvements at Energy Star.

Want to learn more about the greening of existing buildings? Register for a free Webinar, LEED EBOM: 101!

Register Now!

You want to keep tenants in your buildings. At least, if you care about NOI you do. Increased concessions and vacancy loss days come at a cost to your company. And with the ease and ubiquity of social sharing on the internet, happy tenants can equate to free marketing.

So here’s how to ensure that you are being tenant retentive. To optimize your tenant retention strategy, include these general items in your Tenant Retention Plan: (click here for the Checklist and complete Tenant Retention Kit)

A Friendly & Curteous Staff: All property management staff should operate in customer service mode all the time. Attire should be appropriate and staff development training opportunities should be ongoing and include maintenance, janetorial and security staff.

Rapid Response: Set up an online, automated system to respond to all tenant service requests and issues within 1-2 hours. Tenants should be able to track the status of all requests.

Surveys: Every six months, ask tenants to evaluate the property — ask about such matters as cleanliness, maintenance, exterior areas, amenities, noise, parking, and management.

Inspections: Schedule annual inspections to your tenants’ spaces. Make a point to find something small to repair or update during each inspection…especially if a rent increase is imminent.

Building Website: Create a tenant-facing website where tenants can schedule building resources, view building announcements, or access their Tenant Handbook and other building documents.

Preventative Maintenance: Set-up an aggressive, proactive PM Program. The less equipment breaks down, the more satisfied your tenants will be. A web-based property and operations management system can automate this process.

Energy Efficiency: Improve energy efficiency and then make sure to promote these operational savings to your tenants. I.e. “We installed X number of energy efficient lighbulbs in the building.” or “We saved X $ in energy costs this year.”

Tenant Profile: Create a profile of each tenant that inlcudes include a history of maintenance and service activities, especially those actions that might have been extended as a courtesy beyond the scope of the lease.

Learn more about the top factors that keep tenants happy and renewing leases in a complimentary webinar: Full House- Strategies for Tenant Retention. Presented Tuesday, September 13th at 12 EST by tenant representation specialist Patrick Braswell and operations veteran Brett Lazar, this Webinar delivers practical information on tenant retention best practices.

Are you still using excel spreadsheets to manage operations? Are you running breakdown maintenance instead of proactive maintenance?   When was the last time you took a good, hard look at service response times?  These are just some of the indicators that your operations have started to grow roots. And left unattended, these roots will spread wider,  deeper and eventually crack the foundation of your business!

The real estate industry isn’t changing- it’s already changed. Whether you’re an owner, operator, manager or investor, the hold time for assets has increased significantly.  Everyone is looking for ways to improve the bottom line and have a better story to tell potential investors and clients. If you are still running operations the way you did yesterday, last month, or the year before, you are already at a competitive disadvantage.

Owners and operators today must be agile. They must analyze, understand and ensure the performance if their individual assets. This means  re-engineering business processes regularly, adopting new technologies that improve efficiency and aligning roles, staff and disparate systems within their buildings.

Just remember, there is a cost to doing nothing.

Under the version three LEED (Leadership in Environmental Engineering and Design) standards, the Green Building Certification Institute assumed administration of LEED certification for all commercial buildings.  LEED for Existing Buildings (”LEED-EB”) employs sustainable performance standards to measure an existing building’s environmental impact and outlines means for reducing those impacts over time.  The LEED for EB Rating System helps building owners and managers measure operations improvements and maintenance on a consistent scale with the goal of optimizing operational efficiency and, hence, minimizing adverse impacts on the environment.

In the past, most LEED rating systems required a high building occupancy to warrant a rating – 75% – an argument founded on the idea that under-occupied buildings would earn an unrealistic score on what are critical scoring attributes.  Among these attributes are: operating costs; waste sent to landfills; energy and water usage; and greenhouse gas emissions – all of which would be reduced in a lower occupancy environment.  LEED for Existing Buildings addresses whole-building cleaning and maintenance issues, so the entire building is considered part of teh examination process.  The unintended consequence of the high occupancy requirement was to disqualify and eventually discourage a high number of properties from pursuing LEED certification, a concept anathema to the intent of LEED certification.

Finding this unintended consequence untenable, the LEED Steering Committee recently approved a change to the Minimum Program Requirements for LEED for Existing Buildings lowering the occupancy rate required for certification from 75% to 50% occupancy.  The US Green Building Council staff and LEED committee members have confirmed that the occupancy reduction does not undermine the technical integrity of LEED for Existing Buildings.  The hope is that more buildings will take on LEED certification, even in a struggling economy.

For guidance on how LEED for Existing Buildings projects can demonstrate compliance with the minimum occupancy requirement click here. To access an informative microsite detailing how to properly gain LEED certification for existing buildings, register here.

We were very pleased this week to announce our new partnership with eSight Energy! eSight Energy is the creator of eSight, the world’s most sophisticated and comprehensive energy management suite. Utilizing 100% web-enabled technology, eSight offers an extensive range of techniques for analyzing energy usage and targeting sites for significant energy and cost savings.

This partnership will provide Building Engine’s real estate management customers with the ability to measure, track, and act on energy related information. The integrated system will monitor energy usage, provide alerts and work flow tools, allowing users to make fuel-saving adjustments, reduce areas of energy waste and reduce overall consumption.

This effort was driven by our customer’s feedback that energy management is a current and long-term priority for them. Additionally, they saw direct value in an integrated offering that utilized their employee’s daily usage of the Building Engines operation platform and data collection, workflow and communications capabilities.  We are pleased to be working with such a great partner and taking the first steps toward helping our clients in this area of their business.

Learn More about making energy data actionable – Proactive Energy Management: Making Data Actionable

If tenants are the heart of a building, than the structure and equipment in that building is its lifeblood.  Without properly functioning systems, costs will rise, tenants will become dissatisfied and the property will degrade. Over time it will lose value and become less of a viable entity.

Much like your body needs proper care, nutrition, and regular check-ups, the equipment in a building needs the same.  That is the fundamental principal behind the need for a preventive maintenance program.

This certainly isn’t a new or revolutionary concept. However, truly successful PM programs are often perceived as hard to implement and manage in the commercial real estate space.

The reasons for that are fairly obvious:

1.       In a business driven by the issue of the moment, a PM program is a long-term investment with a difficult to identify return.

2.       There may be a short-term investment strategy that conflicts with the long-term nature of a PM program.

3.       The PM program requires knowledge and expertise owned by a few.

4.       Relevant and important information is difficult to access.

5.       There is no visibility into activity, problems and results.

6.       Electronic or online systems that promise to simplify the PM process are often overwhelming, complex and difficult to implement.

7.       Staff is overwhelmed and resists the input of sufficient data necessary to realize full system benefit.

So what is required to implement a PM program that delivers results?

Belief

Everything must begin with an underlying senior management belief that a successful PM program is a core strategic objective.

Management Will

There will often be pushback from teams and there is a change management component to the implementation.

• The most common complaint will be lack of time to input what maintenance teams will portray as a huge volume of information to input.
• This cannot and should not be a manual operation any longer. True efficiency requires automation of the PM process.
• While good systems will help, at the beginning, this is a project that must be managed.

Cooperative Teams

• PM is everybody’s concern and should not just be relegated to the maintenance staff or outsourced providers. The maintenance team needs commitment and help from management to do their job well and deserves input into the program.

A system that works for you

There are many available system choices to consider and evaluate. Ease of use and system reliability should be a given.  The critical evaluation factor should be to find a system that is designed to help you accomplish your specific PM objectives.

Guidance from knowledgeable partners.

Much like the internal requirement of a cooperative team, your system provider must be committed to a long-term partnership far beyond the initial sale. You will require expertise and knowledge from them about what it takes for a successful implementation.

As we wrap up 2010 and prepare for the New Year, this is time of budgets, planning and resolutions.

Make a resolution to commit time to evaluate and plan for the long-term health of your building by taking a long, hard look at the condition of your preventive maintenance program.

I just read that the U.S. office market recovery has begun:

“…that the third quarter the U.S. office market posted positive net absorption for the second consecutive quarter — 5 million square feet absorbed in the second quarter and 7 million square feet in third quarter.” [U.S. Office Market Enters Early Recovery as Absorption, Demand Point Up, Vacancy Turns Corner].

While these are small numbers, they are welcome moisture to a desiccated market.

In the same digital breath, however, Co-Star’s Group’s 2010 Third Quarter Office Review said that “the national office market won’t begin seeing rental rate increases for another three or four quarters or net operating income increases for another four to six quarters.  That means rents won’t start increasing until well into 2011 and net operating income increases will have to wait until 2012.

In the lexicon of Bill Belichick – “that is bulletin board material”.

I think that the experts have it backwards.  Surely, office rental rates will remain flat for a while, but it will be far longer than a few quarters.   Office buildings in 79 metropolitan areas lost 1.9 million square feet of occupied space in the third quarter or 2010, pushing the national office vacancy rate to 17.5%, the highest level since 1993, or so says Anton Troianovski, of the Wall Street Journal in his October 5^th, 2010 article – Signs of Recovery for the Office Market. While economists agree that office vacancies will not reach their record 1992 high of nearly 19%, the recovery will certainly be long and rental rates will remain depressed.  I contend that those rental rates will remain well below their high for another two to three years as corporate recovery fills existing shadow space; 2009 and 2010 leases run their fully renegotiated course; employment begins, or struggles, to recover, and the market absorbs what is a massive inventory of newly constructed space.  Other factors will contribute to the length of recovery, such as changes in workplace design and the growth in popularity of outsourcing and virtual officing.    So, even with the recovery, things look bad for near-term rental rate recovery.

The same is not true for Net Operating Incomes.

The financial downdraft created by the current economy is beginning to change office management attitudes and practices.  The advent of long-term negative growth has shifted management focus back to asset quality and condition as well as towards renewed and better capital planning.  The commercial property management market has become far more comfortable with the “Cloud” and new technologies it provides have allowed progressive real estate managers to see more, to measure more; to manage more successfully, and marshal assets and resources more economically – more intelligently than ever before.   The Cloud makes managers look smarter – be smarter.   Improved visibility into property condition and asset-related activities provides management with enhanced decision-making power and greater revenue producing opportunities than ever before – yielding ever-increasing NOI.

The “Moore’s Law” of real estate management is that a real estate manager’s awareness and use of technology is growing exponentially – and from my limited perch, I’ve seen it double year-to-year.   The more technology a manager uses, the more visibility that manager achieves.  Visibility translates into efficiency which begets dollars per square foot.  Better managed buildings with professional systems and automated services keep tenants happier (retention) and attract new tenants to available space.   While property management dollars are not necessarily in the same order of magnitude as transactional dollars, they are dollars nonetheless.  A dollar saved is another dollar competing for sunlight on the bottom line.

So, I am encouraged by the new focus on management through technology.  It is a healthy change for what had become an old and staid market space. Simply said – quarter-to-quarter, clicks are driving bricks and mortar.

1. Google is a champion of individual liberties.
2. Only Apple truly cares about its customers and caters to their needs.
3. The Internet will connect everything everywhere taking data out of silos and increasing efficiency and liquidity