In the fourth installation, PwC's Don Reed spoke with Bob Best, who directs energy and sustainability services at Jones Lang LaSalle (JLL) in its Americas Region and Dave Gralnik, who is responsible for the firm's solar and renewable energy initiatives. JLL specializes in real estate services and investment management, and Best and Gralnik are at the heart of figuring out how the company can leverage its size to create more sustainable buildings. In our interview, the two discuss their goal of making sustainable building operations an unremarkable idea and what steps need to be taken to get there.
Don Reed: What's it like for building owners who are looking to increase energy efficiency or decrease their carbon footprints?
Bob Best: The market is full of static right now. It's very difficult for building owners to tell what's real and what is not real, who has substance, who doesn't. In many cases, building owners have just thrown their hands up and said, "I'm getting calls. I don't know who I'm talking to. I don't know what they are talking about. I don't understand it." And we say, "You know what? You have us running your real estate for you. We know about this. Let us be your advocate. We'll figure it out. We'll tell you who's for real, who isn't, what works, what doesn't work. We'll bring you options." So, in a way, these issues are creating new opportunities for a company like ours to serve our clients.
Reed: We've heard for years that investment in energy efficiency -- beyond the easy stuff -- just doesn't align for a lot of building owners. Is that changing?
Best: In the current environment, investor-owners' interests can be summed up in two words: three years. That is the investment horizon. As you might imagine, that severely limits some of the more comprehensive things that you might do in a building.
We're still seeing the "low-hanging fruit" kind of things. But at some point building owners hit a place where they go, "You know what? We've got to upgrade the chillers. We have to do a lighting retrofit. We have to change the building systems." So, we know there's a need for some help in making those decisions.
Reed: That's when it gets expensive, right?
Dave Gralnik: Yes, and people are beginning to realize that tenants have to share in this somehow. The owners’ main complaint is that they invest in the equipment, but the tenant gets all the benefit. Owners want to be able to recover their initial investment in a more reasonable payback period. Solving this will help relieve the logjam a little bit. That's why everybody -- including government agencies and municipalities -- are trying to figure out how to change the economics.
Reed: So what kinds of things are working in this context?