VERGE Executive Series: Q&A with Jones Lang LaSalle's Bob Best and Dave Gralnik

VERGE Executive Series: Q&A with Jones Lang LaSalle's Bob Best and Dave Gralnik

GreenBiz continues our series of interviews with business leaders that were conducted as the basis for the report, "Converging worlds," produced in conjunction with PwC.

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?

Best: One of the neat things involves tools that run on top of the building automation system to make it smarter. One of the simpler manifestations of this is called “chiller plant optimization,” where sensors are installed to monitor the chiller plant. Those sensors feed information about the chiller plant into a building automation system to help the chiller plant run much more efficiently. So, old building automation systems monitored things, and people made adjustments. This is one step beyond that. Next up are things like automated commissioning, where the system uses operational algorithms to make decisions that used to be made by people. The automated systems probably do it better, too, because they can process more information faster.

Reed: And this meets that three-year payback?

Best: Yes. We've got one called IntelliCommand; we just rolled it out for a client at some of their properties. It paid for itself in just a few months.

It doesn't make sense for us to provide a solution like this to just one client. We want to take advantage of our size to put something like this together, knowing that we have a lot of clients who'll be interested in using it. From the client perspective, it's a very reasonable investment, but that's because we're taking advantage of economies of scale.

Reed: Are you collaborating with others to bringing options to market or make them more economical?

Best: A lot of these new technologies and business models are well beyond what we know. Our core capability is real estate. And, yet, to do some of these things, you almost have to partner up with somebody to create them. It's not a traditional vendor/supplier relationship, you can't say: "Oh, I'm going to buy your software, and I'm all set." There's so much customization and special need that you almost have to partner up and collaborate with people to make these things happen.

Reed: And this changes the kind of knowledge and internal capabilities you need to develop?

Best: It does. For example, we're bringing in experts in renewable energy, and we are setting up collaborations with companies that know a lot more about energy and large-scale information systems. I think that's what the future's going to look like for people in a lot of businesses.

Reed: Do you have an example of one of the collaborations?

Best: A big power management company called me up about a year and a half ago and said, "We're going to respond to a bid for installing electric vehicle charging stations, are you interested in joining us?" My first question was, "What do you need us for? We don't know anything about electric vehicles or charging stations. We don't understand why you would want to set up a collaboration with us."

And they said, "Because we have to put the charging stations someplace, and that's real estate." And the light bulb went off in my head, saying, "Oh, they're right. To make something like this work, you have to have a collaboration set up between people that know real estate and people that know charging stations.” Things are getting to a level of complexity and technological sophistication where, to take advantage of them, you have to set up collaborations or partnerships.

Modern skyscraper photo by Cardef provided by Shutterstock