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Sustainability in 2022 – Considerations for CRE Owners

Changing Landscape

Over the last decade, Commercial Real Estate (CRE) owners have experienced a myriad of changes relative to building operations, management, and administration. The pace of change is expected to accelerate due to many different factors based on recent trends, the newest of which is sustainability. While return to work, hybrid work, and re-configurable office space has occupied much of the attention of CRE management, on-going and future investments in sustainability will become a prominent component in building operations.

What is Sustainability?

Broadly speaking, sustainability for building owners’ centers on creating scalable, inclusive, environmentally sound, and economically relevant spaces. Balancing all three tenants can be tricky, given the interplay between the state of available technology, visionary roadmaps for what might be, and fiscal realities. Rarely, if at all, do all three align to create a simple model, and this ‘tension’ is fertile ground for innovation and curation in modern building design and operation.

How is it Measured?

Environmental and economic measures may be categorized as direct and indirect, with the former tending to be more objective and useful in financial analyses critical to demonstrating a return on investment or ROI for a building owner. One commonly known measure is that of the venue’s carbon footprint, often used in terms carbon neutrality equations. Other measures include the facility’s energy consumption, and/or its emissive radiative impact on surrounding environs (the so-called heat island effect that is dominant in urban settings). Newer measures concerning inclusivity may consist of access to those with physical hardships, convertible purposes/mixed use, and the degree of repurposing to align to future planning needs.

What are Some Notable Examples?

Recently, in response to climate change advocates promoting reductions in greenhouse gas emissions, the US Environmental Protection Agency (EPA) announced an extremely significant new rulings pertaining to the phasedown of commonly used refrigerants in building HVAC systems. Specifically, under the American Innovation and Manufacturing (AIM) Act enacted in late 2020 and included in the Consolidated Appropriations Act of 2021, the EPA requires the phase down production and consumption of HFCs in the United States by 85 percent over the next 15 years. On a global basis, the HFC phasedown is expected to avoid up to 0.5° Celsius of global warming by the end of the century (EPA, 2021). What this means for building owners is that they will be forced in the next five-to-ten years to invest in newer HVAC technologies that use alternative refrigerants and/or new technologies to provide a comfortable environment in their facilities. The challenges are that the industry doesn’t have affordable and scalable solutions as yet to address this coming timeframe, although there are promising developments with regards to the use of heat pumps that use non-traditional refrigerants and/or non-refrigerant technology like magnetics. The economic paradigm of expecting decades-long maintenance of conventional HVAC systems has been shattered, and building owners must be prepared to plan to invest in new systems to avoid unsustainable future maintenance costs. Indeed, it is somewhat ironic that reliable, established technology will be discarded well before the end of its operational life in favor of untested and untried technology that may have a greater net environmental impact than the equipment it is replacing.

A second poignant example shines a spotlight on the wireless as the proverbial “4th utility”. While wireless networks are primarily utilized for communications and data transmissions (video, IoT/sensors, automation systems, and other), a newer use is to power appliances and devices with unit consumption of 100W or less. Called Wireless Power Transfer (WPT), the technology is still emergent. However, this is a significant development in terms of sustainability for building owners, as it has the potential to eliminate the costs and expenses of providing static electric outlets, thus saving materials investment (copper, steel, plastics) and supporting reconfigurability for dynamic patron uses. What this means for wireless vendors is that they will need to ensure that their product roadmaps consider WPT capabilities to remain competitive as an integrated offering.

In summary, building owners must be aware of sustainability initiatives to not only address the current landscape, but to also be prepared to meet future needs given changing regulatory and societal demands.

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