Sustainability efforts rise to the forefront in modernizing retail real estate
NORTH PLAINFIELD, NJ — Sustainability efforts have risen to the forefront for the retail real estate industry, with property owners and managers, along with their tenants, focusing year-round on incorporating planet-friendly efficiencies. In the following interview, Robert Carson, executive vice president of North Plainfield-based retail real estate services firm Levin Management talks about how certain property upgrades can position shopping centers as good corporate citizens. Has the focus on sustainability increased in recent years?
Energy efficiency has always been a top priority for property managers, but typically with the goal of helping landlords increase the bottom line by lowering costs of heating, cooling and lighting buildings. The exciting part of what we are doing today stems from the fact that many of the new technologies being employed in this area are good for the environment. We know this has become increasingly important to both the owners and tenants we serve. So yes, this issue is taking on added significance. What are the top three technologies that property managers like Levin are incorporating at client properties?
We are seeing stepped-up activity in the areas of solar power, LED lighting and high-efficiency roofing. Let’s start with solar. Why should property owners consider this route?
Levin actually is in the final stages of our first solar project, at Capitol Plaza in Ewing, N.J. With the help of Vanguard Energy Partners of Branchburg, N.J., a national solar construction firm, we are installing rooftop solar panels at 1001 Spruce Office Center, the property’s office component. We anticipate a significant reduction in annual utility costs by supplementing electric power with a clean, alternative energy source. For property owners, certain government incentives make this type of project attractive in New Jersey from a tax standpoint and via SRECs (sustainable renewable energy credits), which are market-traded certificates. Based on the positive experience in Ewing, we are exploring additional solar opportunities. A number of clients and larger big-box tenants have expressed interest in undertaking similar projects. LED lighting is not a new technology. What are the latest developments?
We have been using LED lighting on a small scale at shopping centers for years. However, until recently the technology had not advanced to the point where the bulbs could project adequate illumination to be used high up on poles in parking lots. Now it has. We are in the process of transitioning all of the parking lot lighting at Warren Plaza in Washington, NJ. to LED – with great results. We are targeting several other common-area lighting projects at additional sites.LED bulbs are both energy efficient and long lasting. They typically have a lifespan of four to nine years, depending on the specific use, which reduces costs for both materials and maintenance. How has roofing changed to become more environmentally friendly?
The good news in roofing is that the newest products have higher R-value than past generations. R-value is the level of resistance to heat flowing through a given material. In short, roof systems today provide significantly better insulation – therefore reducing a given property’s HVAC loss via the roof. New code regulations require commercial owners to use these high R-value materials in new construction as well as re-roofing situations. In other words, this sustainability measure is a mandate – not a choice. The catch?
They cost somewhere between $1.25 and $1.50 per square foot more than a typical re-roofing project. Yet while it may cost more, there are real advantages in terms of “green” property marketing. More and more often, prospective tenants – particularly national retailers – are asking us to increase the R-value in their roofs. Tenants recognize that in addition to promoting sustainability, higher R-value roofs decrease their utility costs. This can be a positive differentiator in their choosing a property over other sites with older, less insulated roofs. In general, why should property owners consider going green?
Earth Day certainly shines the light on our responsibility to care for the environment. At Levin, we look for new ways to enhance the value of the shopping centers we manage 365 days per year, by implementing projects that will increase operational efficiency while upholding and enhancing their competitive position. The fact is that many of the best measures to modernize properties and push them to the next level today involve pro-environment measures. Owners and operators that embrace these opportunities can create economic and marketing value while at the same time reducing their carbon footprint.Levin Management has been creating added value for institutional and private retail real estate owners.