Mon, 01/12/2009 - 20:34 — admin
Jones Lang LaSalle: Green Space Today’s January 2009 Firm of the Month
Q&A between Adam Busch, Co-Publisher & Owner, Green Space Today and Dan Probst, Chairman, Energy and Sustainability Services, Jones Lang LaSalle.
Adam Busch, Co-Publisher & Owner, Green Space Today (GST): What is Jones Lang LaSalle’s role in sustainability?
Dan Probst, Chairman, Energy and Sustainability Services, Jones Lang LaSalle: We’re a global real estate services firm, a publicly traded firm. We perform work for corporations and government groups that occupy space they own and lease, as well as for investor owners to lease their multi-tenant office buildings. We’re also major players in the management of retail malls, in hotel renovation and investment sales, and in development management of major projects around the world. We’re not developers or owners except in rare circumstances. Pretty much everything we do is to help owners and occupiers of commercial real estate perform better, financially and operationally.
That gives us a broad view of energy and sustainability strategies for buildings. We are involved in a number of ground-up projects that have received LEED certification or expect to get it. But where our clients can really use our services is in making their existing buildings perform better, making them as energy efficient as possible, or helping them find out what it would cost to get a LEED Silver or Gold certification, and if the cost is worth it, leading the retrofit and documentation process to get certification.
Those are the basic elements. However, we are finding that we can have an even bigger impact by helping corporations to utilize their real estate much more efficiently through the development of portfolio strategies, location strategies, office standards and alternative workplace programs that enable them to reduce their environmental footprint buy reducing their real estate footprint and by locating close to where employees live or close to public transportation. We then help them to make their owned and leased locations operate as efficiently as possible. We also help companies determine their carbon footprint or develop an overall sustainability strategy or set up a more effective employee engagement program. This area is still emerging, and different clients are looking for help in different areas.
Adam Busch, Co-Publisher & Owner, Green Space Today (GST): You just formed the Energy and Sustainability Services group in 2007. How big a part of Jones Lang LaSalle’s business is it today?
Dan Probst, Chairman, Energy and Sustainability Services, Jones Lang LaSalle: What we did last year in launching ESS was to formalize a number of services that we had been doing already, and to announce our intention to develop additional services. We’ve had very strong expertise in energy management for many years—we joined the EPA’s Energy Star program in the late ‘90s, as soon as it was expanded to commercial buildings. We completed our first LEED certified project in 2003. But we didn’t have a mechanism for gathering all of our expertise in one integrated service platform. That’s what ESS brings to the table.
Is it a big part of our business? In one way, it’s tiny. Jones Lang LaSalle’s revenue in 2007 was about $2.7 billion. When you count up the portion of that revenue that would be classified as ‘energy and sustainability,’ it’s not even 1 percent. But it has become a key element in so much of what we do. Every new development we manage, anywhere in the world, is likely to take energy and sustainability into account. It’s an issue at more and more of the facilities we manage, which is more than 1 billion square feet worldwide. It’s becoming a factor in our leasing and property management. It’s fueling some of the work we’re doing as consultants, such as workplace strategy. And of course, it affects us in our own work practices as our clients and investors ask us what we’re doing to be more sustainable. So in that way it’s a huge part of our business.
Adam Busch, Co-Publisher & Owner, Green Space Today (GST): You mentioned workplace strategy. Can you describe what that means and how it pertains to sustainability?
Dan Probst, Chairman, Energy and Sustainability Services, Jones Lang LaSalle: Workplace strategy is really a set of possible strategies, and by that I mean it’s not a one-size-fits-all approach, but a process of getting to the right strategy, with the goal of creating space that enables office workers to be as productive as possible. What really brought this about was the rise of the mobile workforce, people with laptops and cell phones who don’t need to come into the office every day. With people working from home or on the road more and more, many of them don’t need their own workspace. As companies reduce the number of workstations they reduce their space needs, which also means they reduce energy costs. And if more employees are at home or somewhere near their home, that supports sustainable commuting practices.
Another common practice in workplace strategy is to move offices and conference rooms away from the window line and toward the core of the building, and reduce the height of cubicle walls to four feet. This opens up the space so workers don’t feel so isolated and boxed in, and it encourages face-to-face communication, which is still important when it can be done. And this open-space plan that we’re seeing more clients choose also brings in natural light and gives more people a view of the outdoors, and these play into sustainability as points in the LEED system.
What’s interesting is that most clients engage in workplace strategy either to make employees happier and more productive or to reduce space or a combination of the two, but they get this added benefit of sustainability if they pursue certain strategies. So this is another way that sustainability connects to something we were already doing for clients for different reasons.
Adam Busch, Co-Publisher & Owner, Green Space Today (GST): JLL operates in more than 700 cities and 60 countries around the globe. How do you incorporate internal, corporate sustainable practices that can be universally applied?
Dan Probst, Chairman, Energy and Sustainability Services, Jones Lang LaSalle: Although there is a fairly consistent framework for decision-making, we don’t try to apply practices the same everywhere; nor should we. Some regions of the world get very little water, for instance, while here in Chicago we’re right next to the world’s biggest supply of fresh water. So water is going to take on a different significance in different places. Some European countries have landfill taxes, so recycling becomes more important.
But employee awareness and engagement is a universal theme. Simple things like two-sided copying to reduce paper usage, or turning off computers at night, are relatively easy to implement around the world. More important than implementing our internal practices, though, is having a consistent service delivery program worldwide.
Adam Busch, Co-Publisher & Owner, Green Space Today (GST): What are some of the green projects you’ve been involved with around the world?
Dan Probst, Chairman, Energy and Sustainability Services, Jones Lang LaSalle: We were consultants and property manager of 45 million square feet of property at the 2008 Olympics in Beijing, including the National Stadium, known as the Bird’s Nest, which received a LEED Gold certification. Several other buildings at the Olympics were certified green as well. Jones Lang LaSalle Meghraj serves as leasing agent of One Indiabulls Centre, a 1.89 million-square-foot building in Mumbai, India with a LEED Gold certification. We are the facility manager of the first LEED certified building in Latin America, HSBC’s Mexico City headquarters, where we played a role in the green initiative. In the U.S., we were the project manager of Technology Square in Midtown Atlanta, one of the first LEED buildings in Georgia, and last year completed the World of Coca-Cola, which incorporated many sustainable features and has won a number of design and development awards. We helped Procter & Gamble get an Energy Star label for its 1.5 million-square-foot headquarters in Cincinnati.
Adam Busch, Co-Publisher & Owner, Green Space Today (GST): High, upfront costs can prevent Americans and American cities, institutions, and companies from integrating green building and alternative energy systems into real estate. How can these upfront costs be reduced?
Dan Probst, Chairman, Energy and Sustainability Services, Jones Lang LaSalle: There are a lot of things companies can do to be more sustainable that cost little or nothing and will improve the bottom line. The biggest direct payback comes from energy efficiency measures. Building owners should be making sure their buildings run at peak performance regardless of whether they can afford to invest in new lighting or HVAC systems. Some energy best practices cost nothing; others cost so little that the payback is less than a year.
Beyond energy, many other strategies discussed in the LEED guidelines are really best practices and cost little or nothing. You won’t see direct cost savings like a reduced electric bill, but if the facility manager uses green cleaning and pest control products and follows practices that improve the air quality that may result in lower employee absenteeism and better productivity generally. So companies that are concerned about the upfront costs should not let that stop them from moving forward.
You also asked what cities can do to mitigate the cost. The federal government recently extended a tax credit to defray certain costs associated with sustainability. Some cities offer tax incentives or provide fast-track approvals to projects that meet LEED or equivalent standards. These measures don’t solve all the financial issues but they are steps toward a viable solution.
Adam Busch, Co-Publisher & Owner, Green Space Today (GST): Any final thoughts?
Dan Probst, Chairman, Energy and Sustainability Services, Jones Lang LaSalle: I want to emphasize the point that energy and sustainability makes financial sense. We all want to do what’s right for the environment, but companies need to make decisions based on sound economics. The green revolution we’re seeing is not a matter of companies setting aside their financial responsibilities to pursue an ecological mission—it’s a matter of demonstrating how these strategies will make their business stronger and produce a return on investment.