Purpose of the project
In establishing its Global Real Estate Sustainability Initiative (GRESI), TIAA-CREF committed to aggressive energy reduction goals for its real estate portfolio by 2020. In support of this initiative, the organization annually develops a series of individualized Property Energy Targets (PETs) that provide a roadmap for each asset as well as a pathway toward the larger organizational energy reduction goals. Reducing energy usage is a TIAA-CREF priority, and organizational leadership uses the annual PET program to re-emphasize the GRESI goals by proactively compiling and planning energy and water efficiency opportunities at each property for inclusion during budget season.
TIAA-CREF and third-party property management teams across the organization’s US assets collaborate throughout the year to identify potential energy efficiency opportunities at its wholly-owned office, retail, and multifamily properties. The resulting Target Improvement Projects (TIPs) are quantified for cost, savings, and simple payback, and a customized PET worksheet (shown in the graphic below) containing a reduction goal is developed for each property. The development of the PETs has been coordinated to coincide with the capital budgeting process to ensure that cost-effective projects are evaluated by property teams and asset managers, and planning can occur for the next fiscal year. ENERGY STAR Portfolio Manager is then employed to track progress on a monthly basis, as the PETs are designed to reduce energy consumption and costs, while improving ENERGY STAR scores.
At TIAA-CREF, sustainability is an integral part of standard operational excellence, and improving sustainability performance is part of the ongoing Global Real Estate Asset Management effort. Formalizing the specific projects and expected results for each property on an annual basis provides clear objectives for TIAA-CREF and third-party property management staff, establishes a formal ongoing improvement cycle, addresses the “it’s not in the budget” issue that plagues many sustainability opportunities in the real estate industry, sets clear targets for incremental sustainability improvement for each property, and can be aggregated across the portfolio. Further, properly planning for sustainability projects fully aligns with TIAA-CREF’s asset management priorities, as improving energy and water performance has been shown to reduce utility costs, enhances the competitive standing of an asset, improves tenant attraction and retention, and provides engagement opportunities with tenants and occupants.
Success within the PET program is tracked through regular outreach to the property teams, and review of each property’s energy benchmarking data in ENERGY STAR Portfolio Manager. Energy performance for each property is reported quarterly to track progress toward the reduction goal. TIAA-CREF has also begun developing water reduction TIPs for properties with an emphasis placed on assets that are located in drought-prone and water-stressed areas.
Incorporating a formal program that connects high-level organizational sustainability goals to property-level sustainability performance ensures that TIAA-CREF’s values are operationalized. The PET program enables greater insight into the opportunities available to specific asset types, helps TIAA-CREF asset managers to understand the business case for sustainability improvements, ensures that GRESI principles and sustainability opportunities are pursued by property teams, and leverages our benchmarking effort to generate data to continually monitor progress.
"The Property Energy Target (PET) Program allows us to set specific goals that account for the unique operations and opportunities of each of our assets. By providing clear expectations and guidance for how to meet these objectives, our third-party property management teams are equipped for success. Implementing these projects and actively pursuing the PETs allows us to reduce cost and improve the performance and marketability of our assets."
– Nick Stolatis, Senior Director of Global Sustainability and Enterprise Initiatives.