An Efficient Way to Beat Out the Competition

When it comes to leasing commercial space, real estate companies are looking for a distinct advantage that will set their properties apart from other buildings in town. Today, that advantage is sustainability.

“Tenants want to see those LEED-certified plaques. They want to know their landlord is out there exploring avenues to control costs and reduce energy consumption,” says Mike Nelson, who’s been in commercial real estate for 20 years. He oversees the operations of a portfolio of office buildings in the San Diego area for Kilroy Realty Corp.

In the last five years, sustainability and energy efficiency in commercial buildings have gone from a casual interest among tenants to a must-have, Nelson says. So Kilroy brought in a secret weapon: Sara Neff.

You might call Neff the queen of retrocommissioning. As senior vice president of sustainability, she researches new technology and service providers for Kilroy, a company nearly 70 years old that owns and manages commercial and office space in Los Angeles, San Diego, San Francisco, and the Pacific Northwest.

“She’s extremely knowledgeable and willing to try new things to best capture and optimize the resources we have,” Nelson says. “She’s exciting to work with.”

Neff and her team have been key in meeting growing consumer demands. In her first four years on the job, she helped Kilroy, which started with no sustainability program, become the number one real estate company in North America for sustainability across all classes two years in a row, according to the Global Real Estate Sustainability Benchmark.

Neff received her bachelor’s degree from Stanford University in symbolic systems; after a stint at Google, she earned her MBA from Columbia Business School. She was then introduced to Kilroy.

She now oversees the implementation of energy and water efficiency projects, a recycling and green cleaning program, all LEED certifications, electric vehicle charging station installations, and the greening of building and construction standards.

“High efficiency for buildings is the right thing to do, but it also makes great business sense,” Neff says. “The kinds of tenants we want to attract are tech startups and companies that care about sustainability. Google, for instance, only takes buildings that are LEED-certified, and you don’t get on the broker tour for these tenants if you’re not LEED-certified.”

Today, all of Kilroy’s development projects have at least a gold-level LEED certification. The company has clients in a variety of industries, including tech, media, telecommunications, entertainment, health care, engineering, biotechnology, and professional services, among others.

When California, which has experienced severe drought for several years, enacted a law requiring additional utility disclosures for commercial buildings to meet the state’s Energy Star program requirements, Neff took on the significant task of obtaining the necessary usage information from tenants. She then worked with attorneys to add utility consumption disclosure language to the lease agreements.

Understanding baseline consumption gives companies like Kilroy a clearer understanding of good energy performance. “The industry is waking up to this,” Neff says. “Investors are currently rewarding transparency even more than performance.”

Now Kilroy is undertaking a solar initiative. But beyond that, Neff is working to find out how to make solar additions as cost-effective as possible. In some cases, this means pairing solar with battery power.

“Batteries, from a financial perspective, are great. You can take a building offline and run off battery at peak times, then charge overnight,” Neff says. “In some places, combining solar with batteries might be the best option. You can charge batteries with solar so the building can run off battery longer throughout the day.”

Kilroy has also started training janitors at its properties on energy sustainability and recycling initiatives. And the company is involving tenants more and more through social media engagement and formal events.

“Green building has been a passion of mine for a long time, but this is an opportunity to grow it even bigger,” Neff says. “I come from an owner’s perspective, and we owners are not as typically engaged in conversation as architects and engineers.”

Neff is currently serving a two-year term as chair of the board of directors for the Los Angeles chapter of the U.S. Green Building Council and was also named to the USGBC National 2016 Advisory Council, which recommends policy and initiatives. Her service comes with perfect timing, as Los Angeles will also be the site for the upcoming Greenbuild International Conference & Expo this October. 

“We’re going to get to show the world all the amazing things we do,” Neff says.