A well-established, family-owned firm with roots going back to 1896, the Ashforth Company might be expected to do business traditionally. They break the mold, however, when it comes to environmental sustainability. In 1999, before "green buildings" were the hot topic in real estate, the company's West Coast arm, Ashforth Pacific, made a decision to be more sensitive to its properties' environmental impact. They have since earned a reputation as a leader in the field. As an example of their subsequent successes, 2006 energy consumption in their Lloyd District portfolio was nearly two million kWh lower than 1998 levels.
A full-service firm, the Ashforth Company owns and manages over 8.5 million square feet of real estate nationwide, with Ashforth Pacific holdings in Portland, Seattle, and San Francisco. The focus on sustainability arose in part from the company's awareness of commercial real estate's environmental footprint. They believe that businesses must help solve environmental problems, and high performance buildings are commercial real estate's greatest potential contribution. Of course, the opportunity for Ashforth Pacific to better control costs and enhance asset values for their properties is also a key motivation.
A Strategic Approach
Ashforth Pacific takes a cost-conscious approach to improving its properties' energy and environmental performance, focusing on low- and no-cost measures first. "There are always opportunities to enhance efficiency without spending any money. I call it 'enlightened management,'" says Wade Lange, Vice President of Property Management for Ashforth Pacific. This strategy recognizes that small improvements to day-to-day operations substantially impact efficiency.
Ashforth leaders also recognize that when approached strategically, high performance buildings are good for business. Each decision is evaluated from environmental and business perspectives. Says Lange, "At each step, we ask, 'is it a sustainable decision, and is it a good business decision?' If we can't say yes to both of those questions, we reevaluate."
Utility rebates and tax incentives improve the business case for many sound projects that reduce operating costs and enhance tenant comfort, but might not otherwise pass the financial test. Since 1999, the company estimates that it's received rebate checks to the tune of over half a million dollars from local utility programs such as the Energy Trust of Oregon.
However, other projects are put on hold until business conditions can support them. For example, the company has considered applying LEED standards to all tenant improvements. But the tenant makes the ultimate decision whether to comply with that directive or to just find a different office. At the moment, attracting and retaining tenants is the more important business priority, so the project is on hold until tenants are consistently willing to comply with sustainable principles.
That shift may be underway, as environmental impact is becoming more of a priority for tenants and other market players. "We'll know we've reached a tipping point when brokers come to us and say, 'We want Liberty Center, because you run a great building and it's sustainable and energy efficient.' That hasn't taken hold with the brokerage community, but it's getting there," says Hank Ashforth, Chief Executive Officer of Ashforth Pacific.
A Conscientious Culture
When the company's environmental program kicked off in 1999, full-time sustainability coordinators helped get them on the right path, training employees to manage a sustainable business. Now, these principles are well integrated into regular decision-making. To Ashforth Pacific employees, it's just the way that business is done.
During their day-to-day responsibilities, employees from all functional areas determine what each of their disciplines can contribute to efficiency and sustainability. They follow the guidance laid out in the early stages of the program, but also continually revise and improve their tactics.
For example, an early team established a "green" procurement policy for office supplies, such as energy-efficient office equipment. After they laid the foundations for environmentally-responsible purchasing, the team was no longer necessary, but employees still periodically revisit these policies to determine whether updates are required. In fact, more recently, Ashforth Pacific became members of the Responsible Purchasing Network, which evaluates products' sustainability. By taking a company-wide approach to procurement and other business practices, Ashforth Pacific can ensure that decisions and activities are consistent with overall goals.
Integrating "green" into decision-making in this way has enabled Ashforth Pacific to take advantage of opportunities to create value. A recent acquisition in San Francisco was all the more appealing because it was developed nearly to LEED standards, but developers never pursued the certification. Ashforth saw this as an opportunity to increase the potential value of the asset, and plans to pursue LEED certification for the property in the future.
Continual knowledge-sharing ensures that employees retain their commitment and constantly learn from each other. The engineering staff meets regularly to discuss building systems and procedures, share best practices, and help each other improve.
Engineers and property managers make daily decisions that affect energy consumption and other metrics, so building their capacities is a key component of the sustainability program. They regularly attend BOMA Energy Efficiency Program educational sessions. Along with all other incoming Ashforth employees, they also participate in the Natural Step sustainability training program.
Award-Winning Energy Performance
Ashforth Pacific recognizes that energy efficiency is the largest opportunity for green buildings, in terms of potential cost savings and environmental impact. Two Ashforth Pacific properties, One Pacific Square and Liberty Center, recently won top awards in the 2007 BOMA Portland Office Energy Showdown for their superior energy efficiency. The contest required entrants to benchmark their buildings using EPA ENERGY STAR's national energy performance rating system.
The three Ashforth Pacific properties that are now rated in the ENERGY STAR system all earned energy performance ratings in the top 25% of office buildings nationwide. Ashforth Pacific is undertaking an initiative to benchmark the rest of its properties, and engineers closely track energy use on a daily basis.
In One Pacific Square and Liberty Center, Ashforth Pacific focused on two major areas of energy consumption - lighting and cooling. To improve lighting efficiency, they capitalized on low-cost operational changes. It was simple, says Lange: "We'd try to find ways to make systems work more efficiently, so we weren't lighting a space that didn't need to be lit." For cooling systems, building operators closely monitored conditions and identified simple ways to improve, such as taking more outside air into the building in the morning to use less energy during start-up.
Efficient operations in these buildings didn't end with the announcement of the BOMA Showdown results. Rather, it's become standard fare. Engineers now carry cell phones that receive automated text messages when system conditions deviate from set parameters, so that they can be on top of changes before energy performance begins to fall.
Though they're proud of these successes and reputation, Ashforth leaders recognize that high performance buildings are an ongoing effort. "You can never rest on your laurels and turn your attention elsewhere," says Lange. "This is a constantly changing, progressing initiative. We're always striving to improve management and efficiency and take the next steps." Hank Ashforth agrees: "We don't see LEED certification or the ENERGY STAR label as a goal or an end point. Rather, they're mile markers along the way."
A significant next step is to expand Ashforth Pacific's environmental initiatives to the rest of the Ashforth Company. "Based on our success with this program since 1999," says Hank Ashforth, "we're now looking at sustainability on a national basis."
Challenging the Market to Move Forward
Ashforth Pacific sees its role as an industry leader entailing much more than owning and operating efficient buildings. The company is also challenging its contractors, tenants, and other stakeholders to commit to sustainability, and is helping drive a broader shift in the market. In its Portland properties, Ashforth Pacific had its janitorial contractor conduct a one-month trial of "team cleaning," in which one floor of a building is cleaned at a time so that all lights can be turned off as the team moves to the next floor. So far, the energy savings look promising.
For a lighting retrofit project in its Lloyd District properties, Ashforth Pacific received an Oregon tax credit that it passed on to the Lloyd District Transportation Management Association (TMA). The credit gave Lloyd TMA a pool of funds to improve environmentally-friendly transportation options - which, in turn, benefits Ashforth Pacific's properties in the area. Ashforth leaders hope that such mutually-beneficial partnerships will help other organizations buy into the sustainable mindset they've created among their own employees.
Promoting sustainability to tenants is another challenge altogether. In multi-tenant office buildings, tenants' behaviors and choices greatly affect energy and environmental performance. Though Ashforth Pacific can't mandate certain behaviors, they can influence and educate tenants on making smart choices.
Ashforth Pacific involves tenants in environmental efforts by providing easy opportunities to make the right choices, such as providing recycling bins. Further, by simply showing tenants the measures Ashforth is taking in their buildings, they hope to encourage tenants to manage their own businesses in a more sustainable manner. For example, tenants see janitors shutting blinds each evening to prevent the morning sun from increasing start-up cooling costs; eventually, these conscientious behaviors may become automatic for tenants.
Ashforth leaders have already begun to see increased tenant interest in the cost-effectiveness and employee health and productivity benefits of high performance buildings. Says Lange, "We can't point to a tenant and say, 'they're here because we offer a sustainable building,' but that's where the market is going." With a growing industry focus on high performance buildings - and the increasing presence of "green" leaders like Ashforth Pacific - that point may not be very far in the future.