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Jersey Gardens’ reliance on renewable energy is just one of many sustainable or green efforts that saved the REIT money or improved its service to its tenants and the tenants’ customers.
“Glimcher has always looked at ways to save energy,” Kretzer says. “However, in 2007 Glimcher developed an internal plan to reward our facility teams for reduced power consumption.” And the plan is working. Energy efficiency efforts since 2007 have saved Glimcher 23 million kilowatts of power or about $2 million. The cost savings go right to Glimcher’s bottom line because the tenants pay negotiated fixed operations costs.
Lighting retrofits to improve energy efficiency and lighting quality were an important early strategy.
Sustainability means more than just energy savings. Kretzer says tenants are asking for more environmental strategies, and Glimcher has been complying. This may be having a desired effect. The 2010 year-end report shows that 2009 net operating income is up and rent is up, and perhaps most tellingly, tenants’ releasing rate has increased.
Paper reduction has been an important element in the sustainability effort. The Glimcher properties altogether receive 100 million visitors every year, Kreutzer says, and reducing paper use in the bathrooms has saved money and paper. Housekeeping has also switched over to green chemicals for cleaning.
“These [green] efforts make Glimcher a better company,” he says. Tenants benefit as do the shareholders. “And our visitors and communities benefit from our reduced carbon footprint and simply being a good member of our communities.”
At present, Kreutzer says they are considering new LED systems for their parking lots and garages. Test lights are in place now and Kretzer's team is determining their cost effectiveness. He's also considering low-watt, high output lighting for parking garages, as well as LED retrofit packages for fluorescent lighting systems. He’s also looking into evaporative cooling technology for condensers to reduce the heat load on them, saving energy cooling costs.
“We budget a certain amount for energy efficiency every year,” he says. While he’s careful with spending that budget — the decision on a new technology usually means a cost-benefit analysis — the budget has generally been trending in a positive direction.
The final decision, however, doesn’t always come down to money.
“We look at all the metrics when analyzing new projects,” he says. “Some projects can be a cost versus saving neutral and still be a benefit by being green.”
Retail REIT Installs PVs With Power Purchase Agreement
Glimcher Takes Energy-Efficiency, Other Green Steps