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Greening the Real Estate Industry: CB Richard Ellis Leads the Way

Welcome to the team. A non-traditional green building player enters the fold and greens itself in the process

Penny Bonda -- Interior Design, 9/24/2007 12:00:00 AM

A recent conference opened with the following message:

Today buildings account for:

12% of world's water use
40% of world's greenhouse gas emissions
65% of world's waste output
70% of world's electricity consumption

Green buildings save:

30% in energy
35% in CO₂ emissions
30–50% in water use
50–90% in waste costs

Small changes make a big difference:

Switching to CFLs eliminates 470 million tons of CO₂
Recycling 1 aluminum can saves enough energy to run a computer for 3 hours
Adjusting the thermostat 1 degree can save 10% of total energy used
Recycling 1 ton of office paper saves 17 trees and 2 barrels of oil
Recycling creates 6 times more jobs than landfilling

Which conference—a green building organization, a non-profit environmental group or, perhaps a forward thinking state government? Surprisingly it was the World Conference 2007 run by CB Richard Ellis (CBRE). There are two things you should know about CBRE. It manages 1.7 billion square feet of building space and is going green. For the world's largest commercial real estate services company that is a very big deal and the potential impact on our industry is tremendous.

The company holds its conference annually to bring together its many lines of business—property management, asset services, brokerage—pretty much the whole gamut of the real estate industry. This year's theme “Toward a Greener Tomorrow" focused on sustainability. Al Gore keynoted, LEED workshops were offered and the organization's growing commitment to environmental stewardship was reinforced.

Working with both owners and tenants, real estate services companies have the early and best opportunity to engage their clients in discussions about the environmental issues relating to buildings. According to Sally Wilson, CBRE's newly appointed Global Director of Environmental Strategy, real estate is common to all business and those who manage it strongly influence its direction. "Brokers have first touch with the client, they're out there with them at the beginning but it's the property managers that can have can have the greatest impact on the growth of green buildings. Most new buildings will incorporate some measure of energy efficiency and good air quality strategies but there are few controls for changing out the existing stock, of which there is a far bigger supply than new stock going up. Dealing with existing stock is a greater opportunity and has far greater effect on energy reduction."

To insure that its people are qualified to provide green building direction, CBRE has contracted with the US Green Building Council to provide LEED training for the brokers, asset and property managers in both the Commercial Interiors and Existing Buildings rating systems. This program follows other recently announced environmental commitments including CBRE's Corporate Citizenship initiative, which according to president and CEO Brett White, "encompasses a variety of disciplines, including returns to investors, governance practices and ethics, philanthropy and community involvement, employee relations, diversity and environmental sustainability. Perhaps our biggest opportunity lies in taking a strong position in support of environmental sustainability," he states. "As the world's largest real estate services firm . . . our ability to influence how real estate is built, sourced, occupied, and sold is unsurpassed."

Environmental responsibility isn't just a pitch at CBRE, it's an internal policy. Last May the company announced a goal to become carbon neutral by 2010 at the more than 5 million square feet it occupies worldwide through a combination of energy savings, more efficient space utilization, carbon emissions reductions and, if necessary, through investments in carbon offsets. As Wilson says, "We can't lead our clients in this unless we're doing it ourselves."

The commercial real estate industry has been lagging behind others in the building community in adapting to green building standards. As a commodity business, brokers, especially, are generally more reactive than aggressive in pushing green. However, a convergence of events—the growth and influence of USGBC, new research and data, increased media attention, and even the fallout from Katrina—have creating a tipping point of sorts. Green building awareness is suddenly stronger than ever.

To support this interest and encourage more of it, CBRE released a white paper, Green Downtown Office Markets: A Future Reality (pdf). The report says that the green issue has become prevalent in many businesses, as a growing number of corporations are balancing rising energy costs and shareholders' demands for environmental stewardship. " Green building tenant attraction and retention continues to grow stronger, as major tenants increasingly favor healthier air quality over luxury amenities in premium properties, making a green building a better long-term value than an 'SUVproperty'."

"Tenants are no longer looking at base-line rental costs. Instead, they are considering how their real estate impacts their business," states Wilson in the report. "Tenants will pay higher rents if the building's performance reduces absenteeism and turnover, and increases productivity, as these benefits are far greater to a business than lower-priced rents."

The report is worth reading for its quick but focused look at the state of green buildings, the obstacles blocking greater adoption, the growing data supporting the advantages, and the rising influence of state and local governments. As stated, more than 65 local governments have made a commitment to LEED standards in building construction, while others have trimmed the entitlement process and offered tax credits to spur green development. "Despite an overall hesitance to readily adopt green building practices by the commercial real estate industry, it is clear that change is not only needed by may soon become mandatory," the report concludes.

Green design promotes an integrated team approach by bringing together the traditional players - architects, engineers, interior and lighting designers, contractors and others. Until now it's been a hard sell to get the real estate industry at the table. Thanks to CBRE that may be changing. The full text of CBRE's Environmental Stewardship policy can be found on their web site. Read it not only for what it can teach us, but also for where it can lead us.