Helping Tenents Score Big in Energy Efficiency: Hines, KPMG LLP, and Various Tenants

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Hines developed its own recognition program that is easily scalable. Tenants can adopt the principles of the Hines program in offices across the country

Landlord Challenge:

Hines sought opportunities for positive interactions with tenants that deepen relationships, enhance customer service, and achieve sustainability objectives.

Tenant Challenge:

Many tenants in Hines buildings sought help to make their office space more sustainable, validate existing practices, and gain recognition for achievements.

Building:

All leased offices in Hines-managed buildings

Lease Type:

Range of lease types represented across more than 100 million square feet

A privately owned, international real estate firm with offices in 18 countries, Hines has long been a leader in providing high-performing office buildings, evidenced by its 155 ENERGY STAR-certified buildings covering more than 72 million square feet. Contributing to that success is Hines’ recognition that achieving and maintaining green buildings requires an ongoing commitment to energy efficiency and other sustainable practices. So in 2008, Hines developed and launched the internally focused HinesGO (GREEN OFFICE) program to measure and reward sustainable practices in the firm’s more than 200 offices worldwide. Through the program, Hines tasked building managers and their teams with promoting initiatives that improve energy efficiency, create healthy and engaging work environments, and reduce waste. Capitalizing on the opportunity to lead by example with the office space it owns and occupies, Hines encouraged employees to use their own offices to demonstrate to clients, owners, investors, and tenants the many actions they can take to make their operations more sustainable.

“What happens in the tenant space can have a huge impact on expenses, the environment, and employee productivity. So, encouraging occupants to make greener choices is just as important as designing healthy, productive, environmentally friendly workplaces … As we were completing buildings at the top of the sustainability spectrum, but had no effective way to influence what happens inside tenant spaces, expanding HinesGO to include our tenants has been a real value-add.”

–Jeffrey C. Hines, President and CEO of Hines

As the program spread to Hines-occupied offices across the country, tenants began to ask property teams for ways to improve sustainability in their leased spaces. Hines recognized the value of interacting with tenants around sustainability – in terms of fostering stronger landlord-tenant relationships, as well as the energy and environmental benefits for the company’s portfolio. On Earth Day 2009, Hines brought a tenant-focused version of HinesGO to all of its tenants, challenging them to work with on-site Hines staff to assess a broad set of sustainable practices and offering recognition to those that adopt the practices. Hines developed a tenant guide, distributed by all building managers, that clearly outlines the practices, and a scorecard that office teams fill out to evaluate various sustainability metrics (with bonus points for ENERGY STAR certification). Building management teams, including Hines and tenant representatives, evaluate the scorecard; tenants earning at least 70 points out of a possible 100 are awarded the GREEN OFFICE designation.

KPMG, a national audit, tax, and advisory services firm with many of its 87 U.S. offices in Hines properties, was an early adopter of the GREEN OFFICE program. In fact, KPMG’s outreach to property managers as part of its own sustainability program called Living Green paved the way for collaboration around GREEN OFFICE. Darren McGann, KPMG Associate Director of Sustainability, worked with the Hines property management team at the Wells Fargo Center in Minneapolis, Minnesota, where KPMG leases two and a half floors, to implement the program. McGann says that working with Hines has been beneficial in “validating KPMG’s sustainability commitment and practices. Working with Hines, we have been able to get new ideas as to what we can do to be more sustainable, as well as enhancing our own practices.” KPMG encourages all of its office teams in Hines-managed properties to apply for the designation and has even distributed GREEN OFFICE materials to office managers in properties not managed by Hines.

Lessons Learned

  • Landlords: Use recognition as a powerful tool to motivate tenants to take efficiency and other sustainability actions.
  • Capitalize on the opportunity to lead by example.
  • Landlords and tenants can engage on energy efficiency regardless of lease structure.
  • Engagement around sustainability can help to build strong landlord-tenant relationships.
Since HinesGO began in 2008, all Hines offices worldwide and more than 725 of Hines tenants’ office spaces have voluntarily achieved a GREEN OFFICE designation. This includes more than 32 million square feet, or over onethird of Hines-managed space. The success of GREEN OFFICE developed organically, growing first from employee demand for the program, then more with tenant interest in the designation. For Hines, the program demonstrates a commitment to sustainability and energy efficiency while establishing the company as an industry leader in encouraging tenants to set and achieve sustainability goals. GREEN OFFICE for Tenants has allowed Hines to collaborate with tenants while providing a value-added service at little to no cost. Tenants, property managers, and landlords all benefit from the program through increased positive public relations, reduced operating expenses, realized lower net operating costs, and increased asset value.

“The program is designed to create opportunities for the on-site Hines staff to interact with tenants in a productive, mutually beneficial way. The outcome of these interactions is clear – a stronger bond between landlord and tenant that yields lower operating expenses, sustainable practices, and self-help tools for the firm’s clientele.”

– Adapted from "Sustainable Investment in Real Estate," chapter by Gary M. Holtzer, Global Sustainability Officer at Hines