There are indications that in the coming months tenants and employees will increasingly drive the greening of Canadian commercial real estate. There is growing realization that energy efficient buildings with environmentally proactive managers attract the most coveted tenants and buyers. Furthermore the best employees want to work in healthy work environments for companies that put sustainability policies into practice.
Following are examples of ‘green’ real estate strategies taken by three Canadian companies CBRE Canada, TELUS and ISG Capital that emphasize the interests of employees and tenants.
CB Richard Ellis Canada
Stefan Ciotlos, Executive Vice President & Executive Managing Director of CB Richard Ellis Limited in Canada has been tasked with chairing the company’s National sustainability task force. He is currently gathering information from across the country to create a detailed 2007 baseline of CBRE’s carbon usage for all its occupied space along with information about every aspect of the sustainability continuum. The results of study are to be consolidated with other CBRE data from around the World and will become the basis for a comprehensive global sustainability strategy.
While CBRE has said that it is to be Carbon Neutral by 2010 globally, Ciotlos says, “It goes way beyond carbon usage. The new larger umbrella terminology is sustainability, not just green.” said Ciotlos. “It involves every aspect of corporate activity such as air and car travel, food, drinks, procurement policy and waste as well as building operations.”
Ciotlos responsibility as chair of the sustainability taskforce followed upon his organization of the first zero waste CBRE World Conference held in Toronto in September 2007 . Not only was it a sustainable conference, the substitution of electronic for print communication alone, resulted in significant savings compared to the cost of running a conventional conference.
Ciotlos said “when organizing the conference even the location of the conference in Toronto was analyzed for the carbon footprint created by distance participants traveled to the event.“ He indicated that similar types of location analysis could become the norm in situations where there is a mandate to reduce carbon expenditures associated with travel.
CBRE is the largest real estate services company in the World and as such it is a significant global tenant. Later in 2008, when CBRE puts its sustainability strategy to work, with the backing of its 26,000 employees, and extends its philosophy and practice to its clients, we may see a wave of change in the commercial real estate industry.
Trish Clarry, Director of Real Estate Strategy at TELUS , has led the development of a sustainable real estate strategy for TELUS’ 11 million square feet of space which includes both leased and owned properties. TELUS’ multi-faceted strategy includes a consolidation to long-term locations to support business synergies and reduce the overall environmental footprint.
Clarry added TELUS’ commitment to ’give where we live’ has extended its corporate social responsibility philosophy into its built environment. TELUS workplaces offer numerous amenities to its team members such as healthy choice food services, wellness and fitness centres, and robust technology to connect team members across the country and reduce travel.
TELUS’ strategy has led to the development of two LEED Silver buildings TELUS House Ottawa at 215 Slater Street, completed in August 2007 where TELUS leases the entire building, and TELUS House Toronto at 25 York St. where, upon completion in 2009, TELUS will occupy 440,000 sq.ft of office space.
In Ottawa, TELUS consolidated four locations and relocated 300 employees to 215 Slater Street. Clarry said that TELUS conducted a pre-occupancy study to measure employee productivity and satisfaction with their ‘old’ work environment that is to be followed up with a post occupancy study to be conducted at the end of March 2008.
TELUS is also working with several Canadian universities on studies that compare green and non-green buildings. “As TELUS operates in both types of properties but presents the same corporate culture, it is an ideal research opportunity,“ said Clarry.
The results of TELUS research will help to establish the extent and nature of the benefits to employees and tenants of green office buildings. Similar research in the U.S. that quantified the positive impact of green schools on children and school employees has been effective in accelerating the adoption of green building practices in the U.S. education sector.
ISG Capital Corporation
According to David Ogden, President of ISG Capital Corporation, interest in greening the real estate sector “started out with building owners, then property managers and now it is the tenants that are showing interest. You know the concept has penetrated the sector when tenants are paying attention.“
ISG Capital started trading on the TSX Venture Exchange (SUS.P-X) in December 2007 and is Canada’s first public company focused on acquiring and repositioning exisitng buildings through environmentally friendly upgrades. The goal is to create a portfolio of high performance buildings with a socially and environmentally responsible approach. Ogden says “Sustainable initiatives are core components of our value creation strategy. We will naturally do our part to minimize buildings' contribution to climate change.”
The board of directors of ISG Capital includes some of the best and the brightest in Canadian commercial real estate: John Roy, the founder and former CEO of Summit REIT (now ING Real Estate Canada) and later chairman of the Board of Trustees, Amy Erixon, the recently appointed CEO of IG Realty Investments Ltd. and Joseph Sorbara, a principal of The Sorbara Group.
Ogden believes that “value can be created for shareholders by minimizing operating costs in a manner that also increases tenant satisfaction, worker productivity and reduces environmental impact. Tenants are open to taking an active role by amortizing the cost of sustainable initiatives into their leases. It makes excellent business sense”.
When asked what Ogden would say to real estate professionals who still doubt the value of investments that will green their buildings and produce sustainable building management practices he said, “We look forward to meeting your tenants”.
To stay abreast of Green Real Estate issues register for the Green Real Estate Conference to be held on April, 3, 2008 at the Toronto Convention Centre. Register is open until March 28th.