Sustainability & Real Estate

1. SUSTAINABITY AND
REAL ESTATE
PAGE
1

2. SUSTAINABILITY DRIVERS
“It
doesn't
ma3er
if
you
believe
in
global
warming
or
not.
Successful
leaders
must
address
what
is
important
to
occupiers
of
space.
More
efficient
use
of
space,
greater
producFvity
in
be3er
quality
space
and
lower
energy
costs
ma3er
to
all
those
who
fear
obsolescence.”
Source:
The
Journal
of
Sustainable
Real
Estate
Sustainability
Drivers
• Resource
Scarcity
• Cost
Increase
• Gov.
IncenFves
PAGE
2
• Market
ExpectaFons
• Property
ValuaFon
• Revenue
GeneraFon

3. SUSTAINABILITY & REAL ESTATE
PROPETY
OWNERS
&
INVESTMENT
MANAGERS
PAGE
3
Are
interested
in
the
sustainability
performance
of
the
properFes
they
invest
in
84%
Report
that
tenants
are
becoming
more
demanding
in
terms
of
wanFng
sustainable
space
72%
Have
implemented
formal
sustainability
policies
at
the
fund
level
68%
Evaluate
the
sustainability
of
an
investment
during
the
acquisiFon
phase
76%
Source:
Cushman
&
Wakefield.
Property
owners
and
investment
managers
survey
results.
2013
80%
Feel
there
is
a
value
difference
between
a
sustainable
and
non-­‐sustainable
building
16%
Evidenced
that
sustainability
directly
contributed
to
a
rental
premium

4. SUSTAINABILITY AT A GLANCE
Successful
ImplementaJon
• Cost
Savings
• Revenue
Increase
• Healthier
Bo3om-­‐line
• Higher
ValuaFon
Source:
Adapted
from
Sands
ECO360°
Global
Program
PAGE
4
• Be3er
Corporate
Image

5. GREEN BUILDINGS
• Environmental
Leadership
• Water
and
Energy
Efficiency
• Voluntary
Building
CerFficaFons
• Clean
Technologies
PAGE
5

6. RESPONSIBLE OPERATIONS
• Sustainable
Purchasing
Policy
• Waste
Management
Programs
• Efficient
Air
CondiFoning
System
• Water
and
Energy
ConservaFon
PAGE
6

7. STAKEHOLDER ENGAGEMENT
• Environmental
Reports
• Engagement
of
Emlpoyees
• Corporate
Social
Responsibility
• CollaboraFon
with
Local
Community
• Voluntary
CerFficaFons
PAGE
7

8. BIG PICTURE: SUSTAINABILITY TREE
Sustainability
AcFon
plan
Green
procurement
Use
of
cerFfied
products
PAGE
8
InnovaFons
Development
&
RenovaFons
Benchmarking
Environmental
protecFon
Waste
and
CO2
management
Stakeholder
engagement
ReporFng
OperaFng
efficiency
Energy
&
Water
efficiency

9. APPROACH TO INVESTMENT
1
Determine
objecFves
for
an
asset
/
porholio
Understand
goals
for
the
exisFng
financial
performance
&
future
value
of
the
investment
2
Recommend
acFons
based
on
financial
goals
and
objecFves
for
an
asset
/
porholio
3
4
5
6
7
PAGE
9
Align
sustainability
and
with
financial
strategy
Create
P&L
projecFons
Implement
a
scope
of
work
for
the
asset/
porholio
Assess
the
results
Owner’s
ObjecJves

10. SUSTAINABILITY MANAGMENT
(
ON
A
PROPERTY
LEVEL
)
Benchmarking
• Define
baseline
parameters
for
facility
performance
• Establish
key
uFlity
metrics
• Compare
with
industry
standards
AudiJng
• Review
of
facility
performance
(energy,
water,
and
waste)
• IdenFfy
opportuniFes
for
uFlity
cost
savings
• Assessment
of
future
results
(ROI,
NPV,
Payback)
&
recommendaFons
ImplementaJon
• Modeling,
planning,
project
management,
• Financing,
procurement
.
PAGE
10
Results
Assessment
• Results
review
• ReporFng
• Adjustments

11. SUSTAINBILITY AND PERFORMANCE
Corporate
level
Division
Level
Property
Level
To
increase
the
return
for
shareholders
Strategy
AcFon
plan
Aligning
financial
goals
with
sustainability
strategy
by
using
Balanced
Scorecard
and
a
cascading
model
Performance
measures
Sustainability
Balance
Scorecard
Strategic
Planning
PAGE
11
Budget
Performance
BudgeFng
Employee
performance
Employee
Accountability

12. MEASURING FINANCIAL PERFORMANCE
Goal
EsFmate
an
impact
of
conservaFon
measures
on
operaFonal
profitability
and
overall
financial
performance
Summary
of
Financial
Performance
by
Property
and
Company
Measures
to
Annual
EsJmated
Simple
ROI
Implement
IRR
NPV
Saving
Project
Costs
No
cost
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
Low
cost
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
CapEx
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
Combined
Impact
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
-­‐-­‐-­‐
(operaFonal
adjustment)
(funding
from
exisFng
operaFonal
budgets)
(external
and
internal
funding)
SOURCE:
THE
TABLE
WAS
ADAPTED
FROM
AN
HVS’
PROPERTY
UTILITY
AUDIT
AND
CAPITAL
PLANNING
REPORT
PAGE
12

13. SUSTAINABILITY GUIDELINES
PAGE
13

14. MAKE SUSTAINABILITY AN INTEGRAL PART
OF THE BUSINESS
Triple
BoYom
Line
PAGE
14
14

15.
About
the
author:
Vadim
Kostyukhin
graduated
from
Cornell
Hotel
School
with
a
major
in
Real
Estate
Investment
and
Finance
and
from
University
of
Hawaii
at
Manoa
with
an
MBA
in
Management.
A
civil
engineer
by
trade
and
professional
manager,
he
has
been
focusing
on
the
issues
of
sustainability
since
2005.
Currently,
he
is
working
with
Alternaty
Real
Estate,
Vietnam,
as
a
freelance
consultant
and
a
co-­‐
founder
of
two
new
businesses.
Contact
informaFon:
vkostyukhin@gmail.com
PAGE
15
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