Expert Q&As

Q&A: Larry Heard, president and CEO of Transwestern By Susan Piperato

As president and CEO of Transwestern, Larry Heard has 26 years of commercial real estate experience—23 with Transwestern—and has been active in the firm's retail and healthcare initiatives. We talked to him about Transwestern's transition to green, which he is leading through LEED-standard retrofitting of the company’s existing buildings.

Let's talk a little bit about how you're trying to reduce Transwestern's environmental footprint through education and energy-efficient programs.
The two areas Transwestern is primarily focused on are the Environmental Protection Agency's ENERGY STAR® Program and the U.S. Green Building Council's Pilot Portfolio Program for LEED® for Existing Buildings. Because of our commitment to the labeling of office buildings within our portfolio, we have been awarded Sustained Excellence, two years running by the EPA.

Is that a recent designation?
We have been connected to the EPA for the past few years in a very significant way. In 2004 and 2005 we were named Partner of the Year and then awarded Sustained Excellence in 2006 and 2007.

In addition to the EPA's ENERGY STAR program we have become heavily involved with the USGBC's Pilot Portfolio Program. The USGBC has identified 500 buildings around the country that they would like to take through this initial program for LEED-EB certification. Transwestern has 51 buildings in the program.

LEED-EB is a certification process built on sustainable policies and procedures of operating a building. Internally, we have numerous initiatives whereby we're communicating and educating our people on "greening" initiatives. Externally, through outreach in the industry, we have a number of leaders taking part in panels and industry discussions, which enables us to share information with other professionals throughout our industry.

What are some good examples of green retrofitting?
In my view, it's more about a comprehensive management operations and engineering process. The things we are doing include: green cleaning, purchasing green janitorial supplies, ensuring more efficient water flow, retrofitting lighting, window tinting, and recycling. And, those things are really what I would call smart business practices. Most of what we are doing in existing buildings does not require significant capital expenditures, it's more comprehensive repair and maintenance and good, solid, business practices. It actually costs the building owners less than we had thought [to do a green retrofit]. Initially, we believed that through these efforts we could achieve a 12 percent energy usage reduction in a building. But we have found in the first several buildings that have gone all the way through the process that the numbers are going to be closer to 20 percent. So through the early returns—and they are early returns at this point—it looks like it's costing a little less and the energy usage savings are actually greater than anticipated.

A lot of people seem to think that retrofitting a building is harder than actually coming up with new green construction. What's your experience with that?
If you are trying to achieve LEED-EB certification, then it's actually not very difficult. However, if you're trying to reach a Silver, Gold or Platinum level certification you are identifying more expensive capital expenditures. In fact, it could be a bit more challenging to retrofit an existing building to achieve one of the higher levels of LEED certification than it would be under NC, or new construction, which obviously means that you build the building from the ground up just the way you want.

We have discovered that being LEED-EB certified is not as expensive and difficult as many owners had thought at the outset of the program. The beauty of the USGBC's Pilot Portfolio Program is what it will generate. By the end of the two year long process, it will be very easy for owners around the country to see the results of this program, evaluate, and measure the results. More importantly, the program will document how to take a building through the process. Most owners do not know the steps to take a building through LEED-EB certification. Transwestern is trying to be part of the process to demystify it, get the processes down in writing so people can see it and follow the policies and procedures.

Do you think it's a question of people not really recognizing what LEED-EB means, or not really knowing how to go about it, or both?
I think it's more about not knowing how to go about it. My sense is that most people are drawn to the social and environmental components of sustainability. But the business case for "green" has been largely undefined. Programs like the USGBC’s Pilot Portfolio program will put more definition to the business case for going "green".

Tell me about some of the urban buildings that you’re working on retrofitting.
There are two that we have completed. The first LEED-EB building in Illinois was the Chicago Transit Authority Headquarters. We worked with the CTA to achieve Gold LEED–EB. The results of the process were a 12 percent increase in energy efficiency, a 33 percent reduction in water usage, and a green roof that returns 500 thousand gallons of water annually. This building was just awarded a TOBY award in Chicago for office building of the year in the government building category.

The second LEED-EB project that we worked on was in Denver, the Wellington Web Building, owned by the City and the County of Denver. We were also able to achieve Gold LEED-EB certification. The certification of this building is actually the first step in the City of Denver’s five year plan to require LEED principles be implemented in all of their building operations.

How many LEED-certified professionals does Transwestern employ?
We currently have six LEED accredited professionals. We have an additional 40 team members that we have targeted to receive their accreditation by year-end 2009. Our goal is to have at least two accredited professionals in every major Transwestern city by year-end 2009.

What do you expect to see over the next five to 10 years regarding green retrofitting?
I think nearly every Fortune 500 company in America that leases space in office buildings will demand of their landlord that those buildings be EPA ENERGY STAR labeled and LEED-EB certified. As these tenants become more educated and the focus continues to shift to better environmental stewardship, I think this will happen by 2009.

We will also see most large institutional owners in America fund and sponsor efforts that aid sustainability and reduce energy consumption in projects that they own. My sense is that this effort will continue to gain momentum. Right now, one of Transwestern's major initiatives is to prove the business case for going "green" and that will be proven fairly soon. We are going to focus on significant implementation across the country. The common practice for owners and operators of office buildings will be to take sustainability and conservation seriously, and "green" business practices will become the norm.