Adopting new energy efficiency technologies on portfolio-wide basis
The Integrative Design Services group researches and vets new market offerings to pilot, monitor, and bring technology implementation to scale
New technologies improve building performance, enhance service delivery, and strengthen the company’s financial position
Using Technology to Meet Portfolio-Wide Energy Reduction Goals
Sustainability is a core value for Forest City, a national real estate company with a diverse portfolio of commercial and residential properties. The company is continuously researching and vetting new technologies to help its properties reach its energy reduction goals. The Integrative Design Services (IDS) group works in coordination with asset management and sourcing groups to evaluate and recommend best practices for each building’s unique design and facilities management. The group’s objective is to not only improve building performance on an individual basis, but to bring new technologies to portfolio-wide adoption, further strengthening the company’s financial position for its associates and investors.
Forest City business operations are divided into project development and investment. To ensure energy is integrated in each step, the company has developed a process that allows innovation and capital planning to coexist, aligning design aspirations with company goals to leverage business and deploy capital. The implementation model follows Forest City’s overall sourcing policy for equipment and materials. As a project is identified and the scope is developed, early system and material design is cross-checked with internal Energy & Sustainability Standard Operating Procedures, cyber security policies and our risk management strategies. Projects are developed within the guidelines of Forest City’s Energy & Sustainability Policy.
Forest City reviews business plans and property requirements with asset managers throughout the planning cycle. As the first step to introducing new technologies, property needs are matched with a technology that fits building programming and design.
The IDS team is informed of the latest technology developments that are relevant to our industry in various ways, including attending industry conferences throughout the year and meeting with manufacturers and vendors to learn about new or improved products. After assessing and identifying a technology that is most suitable for the property, a pilot project is then put into place to determine its effectiveness. The IDS, facilities, and sourcing teams combine their efforts to follow a prescriptive path to introduce new technologies to properties, with a goal of implementing the most successful technologies on a broad scale.
Step 1. Auditing and Assessment
New technology implementation starts with understanding the building systems involved in the properties. Specialists use the following criteria to audit and assess each building:
Step 2. Research New Technologies
Step 3. Pilot Phase
Step 4. Making the Business Case
Project teams create spreadsheet models of inputs and outputs for technology projects in order to compare implementation costs with potential savings streams. These might include reduced operation, maintenance, energy, and water costs. Once the asset management team approves the model, it can be used on future projects. The technology model’s metrics align with other real estate metrics used throughout the business, such as those for new construction projects or market repositioning of properties.
Step 5. Develop Financing Plan and Negotiate Vendor Agreements
An integral component to project planning is our thorough review of all financing and cash management options. Forest City will map the implementation schedule, including material order and when progress or full payments are needed to vendors for installation. Optimally, operational savings begin in the same year that project costs begin. More options may be discovered by bringing vendors and other stakeholders into the conversation about timing, cash flow and overall financial goals.
Step 6. Broad Scale Implementation
The IDS team brings the procurement department’s sourcing team on board to assist with establishing the boundaries and terms of a contractual vendor relationship. Financial placeholders are entered into the following year’s budget, or a phased, multi-year plan is developed. Engineering and design then takes place in preparation for actual implementation. Designing the year before the project is budgeted helps speed up implementation.
The IDS team provides oversight and is accountable for assisting regional and property-level management staff with implementation and ongoing use of the technology by conducting site visits, commissioning, and providing punch list items.
Step 7. Benchmarking Performance
Forest City tracks all utility efficiency projects in a data warehouse that contains project descriptions, implementation years, and expected annual savings. In our utility bill payment and sustainability tracking tool, utility accounts affected by technology changes are noted so we can account for its changes in future utility forecasts.
Step 8. Lessons Learned
Typical discoveries in a new technology project:
Specific examples from Building Diagnostics Platform:
Any process or equipment change requires a team effort, and every level of the organization is needed to support the technology implementation model, including:
Tools & Resources
The technologies detailed in the attached resource were vetted by Forest City’s internal process and are not regularly recommended at Forest City properties:
This document helps to quickly collect and describe key lessons learned from new technology demonstrations for the purpose of evaluating future deployment.
In order to measure success, Forest City tracks all energy-related projects by date of implementation and compares the properties’ energy usage from a prior year to a full twelve month cycle. In order to measure effectiveness and strategically plan future renovations that improve overall asset performance, Forest City tracks percentage improvement in consumption of energy and water. A cash-on-cost return analysis provides an indicator of project success and is used as a measure to prioritize initiatives. Technology improvements can positively affect cash flows within the same year of implementation.
Savings to the organization can come in many forms. In addition to energy conversation, the Forest City teams track changes to overall work practices, labor resource efficiency, contractor service, and maintenance requirements. Success is also measured by how easily the new technology is embraced by the operators who must maintain it. Property management teams have expressed that the one-on-one experiences with IDS team members has enhanced their awareness of how to optimize building operation.
Ultimately, if a technology project is incorporated into the budgeting process without further proof of concept, and future similar projects are scheduled routinely, then the IDS department has successfully planted into reoccurring business practices.
Through technology, the resident and tenant experience is enhanced by improved space comfort and convenience. Although cost savings can be achieved, it varies by technology. The average expected return for a new technology implementation ranges from 10 to 25 percent, and paybacks can range from six months to three years.
Technologies piloted and implemented on a broad scale:
Technologies currently in pilot stage:
Technologies to be analyzed or tested:
Technology identification and implementation is an iterative process. The Forest City teams are constantly researching the latest and greatest technologies in the buildings industry, and the lists shown above will continue to grow and be refined over time.