Time For A Trim
Investing $1.5 million in energy-efficient upgrades was a big investment for ICORR Properties International, which manages the 12-story, 142,000-square-foot One Sarasota Tower. But going green immediately began to pay off.
For the last several years, ICORR vice president Earl Fossum has been on a campaign to improve the 24-year-old, Class A office building’s energy efficiency. By partnering with the Sarasota-based office of Hill York’s Energy Solutions Performance Group, ICORR lowered One Sarasota Tower’s utility costs. “We had been spending $500,000 a year on electric bills, and we reduced that consumption by 34 percent,” Fossum says.
Fluorescent light bulbs with timers were installed. Staff began turning off the lights on the upper fourth of the parking garage where the sunlight is brightest, and shut off all the parking lot lights at midnight instead of running them needlessly for 24 hours a day.
Hill York also examined the motors that control the air-conditioning system. “The building used to take in air from outside and try to condition it and distribute it throughout the building. Instead, we put in variable CO2 sensors to sense when we needed fresh air as opposed to bringing it in 100 percent of the time,” says Hill York’s director of energy services, Rob Pulsifer. “We have improved the efficiency of the equipment by over 50 percent.”
The reduction in kilowatt hours and greenhouse gas emissions after all the energy improvements is the equivalent of permanently removing 181 passenger vehicles from Sarasota’s roads, Pulsifer says.
To complete the initial energy assessment, ICORR provided the engineers with two full years of energy bills, which allowed them to track the highs and lows of usage. Then ICORR compared the costs of keeping existing equipment to replacing it.
“We looked at how much we were spending to repair our 24-year-old equipment every year,” Fossum says. “Yes, the price of buying the new equipment was substantial. But if we kept going where we were going, we would have spent that $1.5 million in the next 10 years and still have had [decades]-old technology. Now in 10 years, though we’ve spent that money already, the savings will pay for it.”
For companies that may not have the upfront capital for energy-efficient projects, grants and rebate programs are available through Florida Power & Light.
“We have a lot of high-profile tenants—federal tenants and large financial companies—and one of the things they look for is buildings that are run efficiently,” Fossum says. “If you want the best tenants, it is important to give them the best building, and the investment will pay for itself.”
At Fawley Bryant Architects, state-of-the-art technology is replacing by-hand tasks, services are being outsourced, and staff members are absorbing more responsibilities—actions that are saving the Sarasota-Bradenton architectural firm hundreds of thousands of dollars annually.
Mike Bryant, vice president, and Sarah Colandro, director of interior design, have taken various approaches to cutting back, from seeking out more competitive vendors to eliminating obsolete positions. Two years ago, for example, the company eliminated its receptionist, and soon after, eliminated its office manager.
“Like everybody else, we have downsized and economized on how we conduct our daily business,” Bryant says. “Because of the nature of emails and computers, employees now do their own contracts and correspondences, so the role of the receptionist was one we found out we could do without.”
Instead of having one office manager oversee all finance-related tasks, Deltek accounting computer software has assumed much of that role, and an outside accountant comes in twice weekly to complete the rest. “We have a very powerful computer program, and it saves us money and requires less staff effort in getting bills out and paying them,” Bryant says.
Bryant and Fawley also have begun handling insurance and human resource issues on their own.
“There is a lot of multitasking going on,” Bryant says. “All together, it has probably saved us $300,000 a year.”
Five years ago, the firm invested in the then-pioneering Building Information Modeling (BIM) software. “We are one of the few companies that made that commitment, and it cost several hundred dollars in equipment and training, but it helped us produce efficient work with fewer people,” Bryant says.
Some telephones, printers, copiers and toners were recently eliminated, too. “We probably reduced our operations costs by at least 30 percent,” Bryant says.
While office supplies were being eliminated, the company invested in improving customer service and client relationships, bargain shopped for the best deals from vendors and researched the latest alternatives in design software and building materials that would save money over time.
“We’re constantly shopping,” Colandro says. “Every time a contract is up for a renewal, we negotiate to keep prices down. We save costs when doing renovations by specifying materials that have much longer life spans—materials that are less expensive and easier to maintain. It is ongoing cost saving, and it is definitely worth the time it takes to research.”“As the need and the market permit, we are adding, but very carefully, and we really do ask ourselves at every turn, ‘Is this essential?’” Saunders says. “We all have contingency plans and we all work on a budget, but I don’t think anyone was ready to go through seven years of very, very challenging times. I think it made us all aware that we could be better, and it brought us all closer together.”
Rainy Day Savings
Real estate mogul Michael Saunders’ preemptive saving at the market’s peak became her company’s salvation in the tough times.
“As a company, we have always been disciplined with managing budget,” says Saunders, founder of Michael Saunders & Company. “I do believe good advice to any business is you really, absolutely have to have a budget and look at it as best case, worst case.”
The worst-case scenario came when the real estate bubble popped, of course. In 2005, the company had closed $3.4 billion in commercial and residential sales. Then property values plummeted 40 percent, and staff earned 40 percent less income.
“From 2005 to 2011 there was an incredible fall in revenue due to the fall in real estate prices and the fact that people didn’t buy at any price for a while, so we had to budget to that,” Saunders says. “When revenues didn’t equal what we needed to protect our service, we were able to go into savings and invest back into the company. The lesson is: In good times, don’t spend it all. [We followed] the axiom of ‘Put it away for a rainy day.’”
Saunders’ team reevaluated its essentials and nonessentials item by item. The most critical asset was the company’s devotion to customer service, and in that regard, nothing could be sacrificed, Saunders says. The second priority was advertising, which included keeping the company website up-to-date, and branching out via online networks and print visibility. “The Internet will not wait seven years for a market to recover,” Saunders says. “That is always a priority.”
Other line items, however, were sacrificed. They stopped buying office houseplants and deferred other cosmetic to-dos, saving paint by touching up interior trim instead of making over entire buildings, for example. They conducted more webinars rather than sending employees to out-of-state conferences, and they used internal resources to offer training sessions. They tightened the entertainment budget and sent paperwork via standard mail instead of priority overnight.
“We asked everyone to share in the pain,” says Saunders. “We froze salaries. Our management team voluntarily took a reduction. Everyone knew we were in it together, and no one doubted for a single minute that we would survive.”
The company currently has 140 employees; at the lowest point, there were 104. Last year, Saunders added a rental division with 11 new employees to account for the increase in clients seeking rental properties instead of making purchases.
“As the need and the market permit, we are adding, but very carefully, and we really do ask ourselves at every turn, ‘Is this essential?’” Saunders says. “We all have contingency plans and we all work on a budget, but I don’t think anyone was ready to go through seven years of very, very challenging times. I think it made us all aware that we could be better, and it brought us all closer together.”