On December 19, 2007, President George W. Bush signed the Energy Independence and Security Act (EISA), setting sustainability goals for Federal agencies and requiring them to improve their environmental performance. Thus began a massive effort to green Federal operations, with many state governments following suit with sustainability initiatives of their own. The trend has affected not only the agencies themselves, but also the multitude of organizations servicing them, including owners of commercial real estate that lease properties to government entities.

The US General Services Administration (GSA) is responsible for overseeing operations and maintenance of government-owned and -leased facilities across the country. Property owners wishing to lease to Federal agencies must be able and willing to maintain their properties in accordance with GSA sustainability standards, including Energy Star and/or LEED certification.

Reit Management & Research (RMR) is a private company that primarily operates publicly traded real estate investment trusts (REITs). In addition to serving REITs that focus on leasing to private sector tenants, RMR also manages properties on behalf of the Government Properties Income Trust, an REIT focused on leasing to the Federal and state government. Needless to say, the company has become adept at implementing policies and programs to comply with government sustainability standards while meeting or exceeding the budget and performance goals at the company.

RMR uses a three-step sustainability strategy for its property portfolio. Step one is to benchmark the facility using the Energy Star Portfolio Manager benchmarking tool. This allows the company to compare the building’s performance against other existing buildings of similar size and occupancy and in a similar geography. Step two is to determine what measures will have the greatest potential for positively impacting the property’s Energy Star score while meeting other sustainability goals. In the third step, RMR analyzes the ROI and explores the availability of financing for those improvements or whether the programs should be implemented as part of its annual capital expenditure budget.

Lighting and HVAC improvements are the most frequently implemented improvements for Government Properties Income Trust facilities, says John Forester, RMR’s director of energy and sustainability. “Another of our strong initiatives that has proven itself is implementation of real-time energy management,” he says. “It provides a much higher-resolution dataset than monthly invoices and helps us better understand what’s going on in the buildings. We’re pushing [that technology] into more and more properties.”

RMR also recognizes the human element of sustainability and the importance of communication and transparency. The company has recently begun participating in the Global Real Estate Sustainability Benchmark (GRESB), an organization committed to assessing the sustainability performance of public, private, and direct real estate portfolios worldwide (p. 49). “GRESB helps create a standard that can provide a comparison of peers, one that encompasses all sustainability aspects,” Forester says. “It creates awareness that sustainability doesn’t just mean energy and water savings. There’s an employee-engagement perspective, a tenant-engagement perspective, and a corporate-governance perspective to operating sustainable real estate, and all three tiers are very important. Tenant engagement, especially, is something we’ve been promoting, and we see a lot of positive response.”

Forester expects RMR’s sustainability program to continue to benefit all the RMR-managed companies, including the Government Properties Income Trust, in a variety of ways. Besides the obvious benefits of reduced operating expenses and a smaller carbon footprint at the properties that are realized through energy and water savings, the buildings achieve recognition through programs like Energy Star, LEED, and Green Lease Leaders (a recognition program for companies or brokerage teams that implement green lease language into leases), which in turn attracts tenants to the buildings. As Forester says, “The decision to commit to sustainable practices at RMR is strongly embraced at all levels of management.”