Sustainable Strategies
Impacting the bottom line: how workplace optimization
and sustainable strategies dramatically reduce operating
costs
By: Chuck Palm, Senior Director - Facility
Management
Companies today look leaner than their former self
during the economic boom period. The economic recession
forced many of us to look deeply into our organizations
to find ways to control costs against downturned
economic growth. Depending on the extent of the economic
impact on their balance sheets, many organizations
reduced headcounts, right-sizing their organizations to
streamline operating expenses.
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“During the
productive part of the 21st century, roughly
25% of a company’s real estate portfolio
remained unoccupied. Today, the aftermath of
our recession has doubled the rate of wasted
space.”
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While companies are running leaner than their boom
counterparts, much of the real estate supporting
their businesses remains unoccupied. During the
productive part of the 21st century, roughly 25
percent of a company’s real estate portfolio
remained unoccupied. Today, the aftermath of our
recession has doubled the rate of wasted space. Yet,
many companies continue to operate their current
real estate footprint without making adjustments to
reduce usage.
Improving your carbon footprint by
eliminating wasted space
With a new economy emerging, organizations working
to maintain tightened control over operating
expenses can look to combine a workplace
optimization strategy with energy management
practices that create a win-win effect. The results:
dramatic decrease in operating spend and reduction
in carbon footprint.
How can company leaders impact real cost savings
with a workplace optimization strategy?
Following the right-sizing of a company’s staff
and operations, the opportunity to optimize the
workplace can greatly impact a company’s operating
expenses. Areas of opportunity include:
- Consolidating vacant space resulting from
the reduction in workforce
- Reducing square feet per person through workplace
standards
- Using alternative officing (hoteling, hotdesking,
telecommuting)
An organization’s optimization plan should also
take into consideration its overall company
objectives to ensure its real estate flexibility to
accommodate growth or contraction.
Being green to prevent being in the red
In addition to reducing a company’s overall real
estate spend; optimizing a company’s real estate
portfolio directly impacts the energy used to
measure a company’s carbon footprint. It means less
energy to power a reduced amount of space and output
of green house gases. Paired with “green” practices,
a workplace optimization and sustainability plan
represents greater savings opportunities for
companies. An area that can bring immediate impact
and economic control is energy management.
What is energy management?
Energy management is the way your company manages
its energy and utility consumption. It involves a
planning process that enables more efficient
acquisition and /or utilization of energy within an
organization. Example projects include replacement
of antiquated lighting systems, better control of
the HVAC systems or finding a cheaper utility
provider. With an energy management plan, your
company can expect savings opportunities up to 37
percent your total operating spend. This can come in
the form of simple, no or low cost changes to
developing a modernization and capital upgrade
program to help your company move more quickly and
efficiently against competitors.
So, what are some steps your company can take to
impact your operating spend with energy management?
We’ve listed a few energy reduction strategies we’ve
helped our clients implement below.
As easy as replacing a light bulb
As the largest single user of power within a
building, lighting is an easy target to draw cost
savings. In many cases, lighting can be replaced
within a building without having to replace the
lighting fixture yielding as much as 20 percent in
savings opportunity.
Using only what your company needs
Have you ever heard the saying, “Use only what you
need.”? Perhaps, your mother told this to you at a
young age, as you reached for a tube of toothpaste
and lathered it on liberally over a toothbrush. With
energy, a new technology called demand-based
ventilation is taking this principle and tailoring
the amount of HVAC and ventilation to a building’s
population.
Now more than ever, commercial use buildings have
fewer people occupying them, on a daily basis, than
what was originally designed. This difference
represents a savings opportunity. With demand-based
ventilation, CO2 sensors are used in buildings to
determine occupancy load. CO2 levels change very
slowly with occupancy changes, so additional
technologies will need to be developed. In the mean
time, CO2 sensors can reduce the energy use of a
building.
Real time energy monitoring to identify excess usage
and lessen consumption
Most existing building energy management systems
control the heating, ventilating and air
conditioning (HVAC), but have no feedback mechanisms
for energy use. This makes it difficult for building
operators to see the impact of changes they make.
With technology to provide real-time energy
monitoring, companies can employ these systems to
allow the building operations personnel to make
changes, and immediately see the impact on their
energy use, driving significant savings.
Ensuring your buildings perform efficiently
For companies looking to drastically impact their
operating spend, a structured process called
building commissioning can reduce annual operating
costs. What is building commissioning? Building
commissioning is a structured process whereby the
architects and engineers ensure that a newly
constructed building performs as designed. In
general, the cost of commissioning a new building
ranges from 0.5 to 1.5 percent of the total
construction cost. In return for this investment,
commissioning reduces the annual operating costs by
eight to 20 percent. Depending on the building type
and complexity, this can lead to a rapid payback of
the initial investment.
Improving business performance through real estate
Being green and reducing your company’s energy
consumption is one way you can impact your company’s
performance while making a difference in your
community. A greater opportunity to impact an
organization’s carbon footprint and operating spend
comes from optimizing its workplace. Because many of
the savings opportunities are operationally oriented and
do not require capital, paybacks are often less than six
months.
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Chuck Palm is a Senior Director in NorthMarq's
Facility Management practice and leads the company's
Sustainability team. He can be reached at
chuck.palm@northmarq.com.
This article first appeared in the
October 2009 InSite newsletter.
NorthMarq offers commercial real estate services,
including transaction and advisory services, real estate
management, and debt and equity placements, to investors
and occupiers of commercial real estate from its
headquarters in Minneapolis. The company manages more
than 60 million sq. ft. of retail, industrial and office
assets in 22 markets around the country, handles more
than 7,500 transactions annually and provides real
estate debt and equity financing, and commercial loan
servicing in 32 offices coast-to-coast, with an average
of $7 billion in annual production volume and services a
loan portfolio of more than $40 billion