UNITED STATES - TIAA-CREF Global Real Estate's energy benchmarking initiative has helped increase the real estate portfolio's value by improving energy intensity by 3.6%.
TIAA-CREF's environmental initiative, which was implemented in 2007 to reduce carbon emissions by 10% by 2010, has saved around 32m kilowatt-hours and 22,520 metric tons of greenhouse gas missions, according to the firm.
"Creating value for our tenants and clients and reducing our impact on the environment are closely tied together, as implementing no- and low-cost and accretive capital improvements to improve energy efficiency also improves the economics of our real estate investment portfolio," said Nicholas Stolatis, director of strategic initiatives of TIAA-CREF Global Real Estate.
The firm has implemented its energy strategy across its entire real estate portfolio, and includes simple methods such as operating properties on Saturdays at tenants' requests and ensuring lights are off when offices are unoccupied.
"I think it makes a tremendous difference. If we operate our buildings more efficiently than our competitors, we are going to have higher returns. We will generate more income because our expenses are lower," Stolatis told IPE Real Estate.
He suggested that including environmental standards in investors' portfolios increases the chances of attracting tenants and therefore reduces the vacancy time.
"It applies to any owner of real estate. Pension funds that have large portfolios are certainly well-advised to run their buildings efficiently and have a metric that is acknowledged and recognised in the industry as being a true and honest representation of the efficiency."
Commercial property researcher CoStar last year argued buildings with Leadership in Energy and Design (LEED) certificates commanded rent premiums of $11.24 (€8.3) per square foot over non-LEED properties and had 3.8% occupancy.
TIAA-CREF began benchmarking its office buildings by using the US Environmental Protection Agency (EPA) software which gives companies an energy efficient rating and allows them to track their progress.
The firm developed an "energy management action plan" for its headquarters in New York which involved replacing the cooling system with ice thermal storage chillers. According to TIAA-CREF, this has saved six million pounds of carbon monoxide from the atmosphere.
TIAA-CREF, which worked with over 25 third-party property management companies to make the energy efficiency improvements, also distributed 255,000 energy efficient compact florescent light bulbs to its tenants in the United States.
The EPA recently named TIAA-CREF a 2009 Energy Star Partner of the year for the second consecutive year.
TIAA-CREF has approximately $63bn of real estate assets in the US, UK and Western Europe, including $19bn in directly-owned properties.
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