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Value-Enhancement and Sustainability

May 08, 2017 | Michael Lanning CPM

In his latest column for NREI, IREM 2017 president Michael T. Lanning turned his attention to the ongoing issue of building sustainability, noting that, “In this ever-advancing field, the ongoing education of property and asset managers is key.”

Happily, the industry is responding. “First,” he writes, “more and more practitioners are investigating our educational offerings to enhance their understanding of the issues involved with sustainability. In addition, the number of properties that have achieved their IREM Sustainable Property Certification continues to grow. (The Institute also hit a major milestone this year. We are proud that IREM has earned the US Environmental Protection Agency’s 2017 ENERGY STAR Partner of the Year Award.)”

The goal of sustainability is ultimately one of value-enhancement, and it is a process developed jointly by the asset and property manager. “Asset managers are being driven by their portfolio managers and shareholders to drive value for assets in their portfolio,” Lanning says. “They recognize that to stay competitive and increase the value of the assets in their portfolio, sustainability needs to be near the top of their to-do list.

“That cannot be done without the presence of property managers to provide the building analytics that support sustainability initiatives,” he continues. “As Sara Neff, Kilroy Realty’s SVP of sustainability, stated in the Building Performance report, ‘Property managers are a great group to do these analyses. They understand the full benefits of a project because they know their buildings so well.’ Indeed, asset managers look to property managers to create a baseline of sustainable property operations and management.” In most cases the asset managers set goals for resources and cost reductions and task the property managers to meet those goals.

Lanning points out that there are many variables in this scenario, and he listed three: The fact that “different buildings demand different solutions to the sustainability question. Then there is the mindset and capital considerations of ownership. Also, smaller shops might find it hard to develop that in-house understanding because of restraints in time, manpower and focus.”

Despite those difference and those constraints, he concludes: “The marching orders remain the same. All property managers today need to be knowledgeable on best practices and the products and services available to them that will best fill their shared goal of value-enhancement.”

Read the article in full at National Real Estate Investor Online.

About the Author
Michael T. Lanning, CPM, is 2017 president of IREM. In addition, he serves as senior vice president and city leader for the Cushman & Wakefield, AMO, office in Kansas City, Mo.

Comments

19 May 2017 | Vijay Kapoor
Well said that "to stay competitive and increase the value of the assets in the portfolio, sustainability needs to be near the top of the to-do list". I agree with this. Financial planning has no value without sustainability.
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