For Kimco Realty, Slow and Steady Wins the Efficiency Game
Kimco Realty has racked up impressive energy efficiency and usage reduction gains during the past five years. The key message from an executive who helped design and carry out its program: Don’t expect immediate results.
Kimco says that it is North America’s largest publicly traded owner and operator of open air shopping centers. Its latest sustainability report, which covers those 500-plus properties, says that it decreased energy consumption in areas with its operational control by more than 15 percent since 2011; executed 172 sustainable improvement projects representing an investment of $9.7 million; deployed photo voltaics that generate 3,380 MW per hour in solar and diverted about 54,495 metric tons – a quarter of operational waste – from landfills.
The company controls energy use in common areas that it controls in the shopping centers. The stores themselves are not included.
Will Teichman, the Senior Director of Strategic Operations for the New Hyde Park, NY-based company, told Energy Manager Today that the keys are planning and patience:
The thing I would say is that we didn’t get there over night. The report we issued was five years in the making. The first two years of the program we did not have a real lot to show for it. The reason is that the only way to get started on the large portfolio improvement path is to start making investments in foundational building blocks that don’t necessarily generate huge results. An example is that we spent over a year just getting our arms around utility accounts…There are tens of thousands of electrical and water bills. We were trying to make sense of these.
The key is to prioritize projects and then execute systematically and proactively. “Initially we focused on where we could derive the largest incremental savings with the least investment,” he said. “We looked at any number of energy conservation measures that we could invest in. We prioritized or ranked on an ROI-type metric: “How much energy we save can we save per dollar we spend?’ It is very basic business logic.”
The company came to the conclusion that lighting was the most logical place to start. Many organizations begin with LED changout. For Kimco, however, the first step was to give facility managers remote capabilities to control the lights. Kimco, Teichman said, is a lean organization and personnel are not necessarily onsite at each location every day. Providing the ability to ensure that lights are turned off and on appropriately is long hanging fruit. The company’s needs for a low cost platform built on open standards led it to design its own iPhone app which is based Tridium’s Niagara.
The key, Teichman said, was that great savings can be found in steps that are not necessarily the sexiest. “It isn’t necessarily the flashiest of programs, but if you think about it saving energy with lighting is as simple as turning the light switch off when you didn’t need lights,” he said. It is more complex, but essentially invested in the equivalent of remote light switches.”
Other projects include solar voltaics – the company has deployed systems at six properties in New Jersey – and closer cooperation with tenants.
Helping tenants spend less on energy does not have as direct a benefit to Kimco. The indirect benefits potentially are great, however: The less a tenant spends on energy, the more it potentially spends on rent. Such efforts also tend to make improve the image of the property and result in a happier and perhaps better tenant. Such steps also please investors as well, which is very important.
Kimco’s approach is to be strategic, play a long-term energy efficiency game and understand that the greatest gains are not necessarily the most dramatic or immediate. “At the end of the day, the quickest way to save energy is to run existing equipment more efficiently,” Teichman said. “Managing equipment more effectively is the number one thing to do and quickest way to save energy.”
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