Betall LP

Looking to lead┬áSenior executives Remco Daal and Cheryl Gray tell Martin Ashcroft how CanadaÔÇÖs largest real estate services company is leading the market with proactive initiatives in sustainability. ÔÇ£If youÔÇÖre not building to a LEED standard of some sort, youÔÇÖre not thinking ahead,ÔÇØ says Remco Daal, president and chief operating officer of Bentall LP, CanadaÔÇÖs largest real estate services company. ÔÇ£If youÔÇÖre thinking of the long-term value of the asset, especially a major office asset, LEED is pretty much the minimum standard today.ÔÇØA rating system established by the United States Green Building Council in 1998, Leadership in Energy and Environmental Design (LEED) was originally considered a fad by many in the industry, mainly because it added up-front cost to the construction process. Only a few years ago, developers who aimed for LEED certification were considered pioneers. If youÔÇÖre not doing it now, though, you have been left behind. So how did that happen?Cheryl Gray, senior vice president, National Real Estate Services, provides some insight. ÔÇ£The pricing uncertainty in sustainability projects or programs three to five years ago has started to work its way through the market. In the beginning this uncertainty often resulted in pricing premiums, but thatÔÇÖs not really the case anymore.ÔÇØ But there are other factors at work, too. ÔÇ£WeÔÇÖre also getting smarter about how to apply sustainability in the industry,ÔÇØ she says. ÔÇ£In 2005 I attended the first national Green Real Estate Conference in Ottawa. People were asking what LEED was all about. TheyÔÇÖre not asking anymore because they know. Everyone has moved far up the learning curve since then.ÔÇØThe bottom line has always been the primary driver of company strategy, but the green/ sustainability movement has muddied the waters in the last few years. Should long-term cost savings outweigh short-term expenses? ÔÇ£Our institutional property owners all have sustainability on their radar screen,ÔÇØ says Daal. ÔÇ£Today they are much more interested in the triple bottom line. ItÔÇÖs responsible property investing, and sustainability is a central part of the equation.ÔÇØBentall does not own properties itself; its focus is entirely on client-owned assets. Founded as a small construction company in 1911, almost a hundred years later it is now the largest Canadian-based real estate advisory and services organization with three operating groups, Investment Management, Real Estate and Retail Services, working from offices across Canada and in the northwestern United States. Its clients tend to be long-term investors like pension funds, educational institutions, and life insurance companiesÔÇöclients who traditionally look for responsible capital growth with low risk, and even more so in an uncertain economic climate.ÔÇ£At the end of the day itÔÇÖs the quality of the portfolio and the quality of the tenancies,ÔÇØ says Daal. ÔÇ£For the most part our managed buildings are 95 percent occupied or better. We have a very limited and distributed expiry profile. The strategies we have employed over the last few years are bearing fruit during the downturn. Inevitably, there will be challenges, but I think that by and large our clients are well positioned.ÔÇØOn the real estate side, the managed portfolio extends to over 650 properties valued at over $17 billion and comprising more than 75 million square feet. BentallÔÇÖs managed portfolio ranges from the small convenience centers and large regional malls managed by its retail group to industrial parks and a very strong office portfolio which accounts for close to 50 percent of its managed assets.Bentall also has a significant property development portfolio and one that saw the National Association of Industrial and Office Properties (NAIOP) recognize the company as Developer of the Year for North America in 2006. One of the companyÔÇÖs most prestigious developments is the eponymous Bentall Centre, the collective name for five separate office towers in VancouverÔÇÖs financial district which together comprise the largest integrated Class A office complex in the city. Bentall 5, the final tower in the complex, was developed for SITQ and was completed in 2007. ÔÇ£ItÔÇÖs the best located and most efficient office complex in Vancouver; it has an excellent tenant profile, great amenities and access to rapid transit.ÔÇØ says Daal. The abundance of natural resources in Alberta has attracted business to the province faster than anywhere else in recent years, a trend that has not been missed by Bentall and its clients. In Calgary, Bentall is developing Jamieson Place, a 38-story office tower. One of CalgaryÔÇÖs first LEED-designated buildings, Jamieson Place is being built by EllisDon Construction to maximize energy efficiency and reduce environmental impact. Construction materials and design conform to state-of-the-art environmental standards, and heating, cooling and lighting systems will provide long-term energy cost benefits. Sophisticated building systems are being incorporated to ensure the maximum level of tenant comfort and safety. Jamieson Place is being developed for British Columbia Investment Management Corporation (bcIMC), is already 96 percent leased and will be completed in December 2009. But BentallÔÇÖs commitment to sustainability is not confined to the development of new property. Initiatives relating to responsible property management at its 650-plus managed portfolio are drawn together under its ForeverGreen banner. ÔÇ£WeÔÇÖve built a lot of properties but weÔÇÖve also got a lot of existing building stock out there that makes huge demands on our environment,ÔÇØ says Gray. ÔÇ£We have a role to play in managing their impact, too.ÔÇØ┬á One major initiative was to improve the way buildings were cleaned. ÔÇ£Greening Your CleaningÔÇØ is a holistic approach to janitorial services, encompassing the type of products being used, cleaning methods and even how staff are trained. ÔÇ£When I started searching for specifications I could not find any in the janitorial industry,ÔÇØ recalls Gray. So with the help of an experienced industry consultant, Bentall devised its own standards. ÔÇ£When we went out to market with the standards we wanted our janitorial providers to use,ÔÇØ she continues, ÔÇ£many assumed it would cost more, but then we rolled it out and it didnÔÇÖt. It was just a different way of doing things. It always takes a little time to change what youÔÇÖre doing but it doesnÔÇÖt always mean a jump in cost; sometimes it even saves money.ÔÇØÔÇ£There are many initiatives we could highlight,ÔÇØ adds Daal, ÔÇ£whether itÔÇÖs with our clients, our tenants, our services, our suppliers, even our employees. They are all opportunities for us to show leadership.ÔÇØ Indeed, Bentall is walking its own talk on the corporate side of its business, recently announcing its intention to achieve carbon neutrality this year. ÔÇ£All our attention to sustainability in our client portfolios reinforced our desire to step up our game corporately and reduce our own footprint,ÔÇØ says Daal. Bentall calculated its corporate carbon footprint late last year, including the Scope 3 measure of employee commuting. Initiatives will likely include the purchase of green electricity for corporate locations and an employee engagement strategy to reduce energy usage and change commuting behaviors. ÔÇ£Our goal is to get to carbon neutral by changing the way we interact with the environment. We will no doubt have to purchase more gold standard offsets to start with, but our intention is to reduce our reliance on these substantively over the next few years as we change the way we work, from business travel to printing, to our overall waste management.ÔÇØ Back on the property side, Bentall now has a three-year sustainability strategy which is continually updated as technology and building practices change. ÔÇ£It doesnÔÇÖt mean we can do it all,ÔÇØ says Gray, ÔÇ£but if you do one thing better today than you did yesterday youÔÇÖre making progress. We wanted that roadmap to draw upon.ÔÇØBentall also makes use of the BOMA BESt certification program (formerly known as BOMA Go Green) operated by the Building Owners and Managers Association (the acronym BESt comes from Building Environmental Standards). With four possible levels of achievement, the BOMA BESt certification provides a framework for environmental management and offers owners and managers a way to differentiate buildings in a tight property market.ÔÇ£The Bentall Centre in Vancouver was the first building certified Go Green in Canada,ÔÇØ says Gray. ÔÇ£We also had the first retail complex in Canada and the first industrial property to be certified. Today we have 186 properties across the country in the BOMA BESt program with 161 of them certified, which makes us second only to the federal government in terms of the number of buildings by any single owner/manager in the BOMA program.ÔÇØBentallÔÇÖs achievements have not gone unnoticed. It has been ranked as one of the best companies to work for in Canada for three consecutive years through its inclusion in the 50 Best Employers in Canada list, the result of an annual survey carried out by Report on Business magazine and Hewitt Associates, a global human resources outsourcing and consulting firm.Its real estate expertise has been recognized with numerous industry and marketing awards from the International Council of Shopping Centres, NAIOP, the Retail Advertising Council, BOMA and others, and its buildings are always winning awards. Many of its people have also been recognized for their achievements and leadership (Gray herself being one), both in the real estate industry and in the community at large. ÔÇô Editorial research by Vincent Kielty┬á