Commercial Property Management
A lack of visibility into the energy and water usage of the third-party-managed assets
Adding sustainability metrics to the existing property governance scorecard, part of a formal performance assessment of third-party property managers
TIAA-CREF can better understand resource costs, estimate savings associated with improvement projects, and verify that projected results are achieved
Data Update and Certification Scorecard
TIAA-CREF’s goal was to improve asset management’s visibility into the energy and water usage of the third-party-managed assets and to ensure ongoing attention to ENERGY STAR® achievements. To address several barriers, TIAA-CREF added sustainability metrics directly related to the maintenance of their respective ENERGY STAR Portfolio Manager accounts to the existing property governance scorecard for commercial office, retail, and multifamily real estate assets. The quarterly scorecard is part of a formal performance assessment of third-party property managers.
TIAA-CREF faced the following energy reduction barriers:
Delayed or lagging data updates in Portfolio Manager – Poor data quality and inconsistent updates for energy and water meter data prevents precise analysis of progress towards sustainability goals. The scorecard serves to reinforce the importance of accurate and consistent updates to the ENERGY STAR Portfolio Manager profiles.
Limited access to energy, water and space use update data – An understanding of the individual ENERGY STAR accounts maintained by third-party property management teams can be difficult to obtain and monitor by executive and asset management in a transparent and efficient way. The scorecard system provides easy access to a property- and portfolio-level understanding of the timeliness of data updates and ENERGY STAR recognition.
Lack of ongoing attention to ENERGY STAR recognition – Since eligibility for ENERGY STAR certification is on a rolling basis for each property, property teams can lose track of when their properties are eligible. TIAA-CREF encourages the property to apply or re-apply as the case may be immediately upon that property becoming eligible. The scorecard helps to track and encourage the property management team to seek recognition by applying promptly.
Tracking energy and water usage was deemed a key organizational priority, and TIAA-CREF leadership agreed to include energy and water efficiency as part of the formal property manager annual performance review process. In addition, the results of the annual performance review process for individual property managers are aggregated for review at the account level to measure efficiency progress.
TIAA-CREF developed a simple scorecard to be filled out at the property level that provides asset management with visibility into how well individual properties are tracking energy use, water use, and ENERGY STAR certification.
Given the existence of the property governance scorecard platform, it was fairly straightforward to develop the metrics to determine a score of green, yellow, or red. The creative part was establishing fair and reasonable benchmarks to evaluate their third-party property management teams on a quarterly basis. The cooperation and collaboration of the TIAA-CREF property management governance team, their sustainability consultant, and the third-party property management teams were required to ensure the initiative’s success.
The process changes that made this solution a success were:
To facilitate the scorecard program, all properties in the portfolio must be previously benchmarked in Portfolio Manager and shared to a master account.
Because the scorecard metrics were developed to fit within the already-in-place third-party performance review and property teams were already using Portfolio Manager, it took less than six months to update the scorecard and establish complete buy-in.
At TIAA-CREF, sustainability is viewed as an integral part of their standard operational excellence practices. The data required to track the sustainability metrics is part of the on-going Global Real Estate Asset Management effort, so there is only a small incremental additional effort required to collect, track, and disseminate the sustainability metrics as part of the property governance scorecard.
On a quarterly basis, each property receives a score in three possible areas: Energy, Water, and Certification.
Success of this scorecard program is ultimately measured in the percentage of properties in compliance with the corporate property rating policy. Since the inception of the scorecard, the percentage of properties maintaining an up-to-date Portfolio Manager account has risen from only 55% in compliance (green rating) to nearly 90% for energy metrics and 80% for water metrics in the most recent scorecard.
Incorporating benchmarking into third-party property manager performance reviews company-wide enables additional reports and analyses at the property and portfolio levels. Tracking this data enables TIAA-CREF asset managers to understand resource costs, estimate savings associated with improvement projects, and verify that projected results are achieved.
At the property level, third-party management teams typically discover additional benefits to tracking energy and water use over time, such as documenting achievements, identifying aberrations, and enhancing performance.
After a year using the scorecard, TIAA-CREF saw a measurable increase in properties reporting their data in Portfolio Manager. At this time, over 99 percent of properties are reporting.