Wednesday, February 22, 2017
Thursday, February 16, 2017
By EILENE ZIMMERMAN
On a Thursday night in October 2013, Simon Brooks packed his belongings and drove west toward Silicon Valley, thinking he was on his way to creating the next Scrabble app, a word game he called Gadzookery. He had little to lose. Mr. Brooks owed more on his house in Louisville, Ky., than it was worth. His marriage was over and he had been working in restaurants and bars for two years, ever since the financial crisis forced him to leave his job as a mortgage broker.
“I put my dogs and my bags in the car and drove to the Dojo,” Mr. Brooks said. He was referring to Hacker Dojo in Silicon Valley, a community space for technology start-ups whose members (fees generally start at $125 a month) have round-the-clock access. The hacker space proved to be the key to his new enterprise — just not in the way he had imagined.
Mr. Brooks arrived with $12,000 and a rough version of his educational word game. He hoped to assemble a team at the Dojo to help him rebuild it but, once there, he found neither the developers he needed nor a room to rent. He wound up in motels instead. Four months later, he was out of money and living in his 1999 Lexus. When the Dojo’s manager asked for a volunteer to clean the restrooms and kitchen every afternoon in exchange for free membership, Mr. Brooks raised his hand. Without realizing it, he had taken the first step toward creating his start-up: a cleaning company that relies on analytics to improve efficiency and set prices. Larry Maloney, a founding member of Hacker Dojo, said people were dissatisfied with the quality of the work done by the cleaners before Mr. Brooks volunteered.
Normally, said Mr. Maloney, the Dojo smelled a bit sour, largely because of developers working late into the night. “After Simon,” he said, “it smelled squeaky clean.”That was no easy feat. The Dojo is a sprawling space of more than 16,000 square feet. It never closes and typically has at least 300 visitors each day.After eight months, management got rid of the small local firm that did its cleaning and began paying Mr. Brooks $400 a month for his services. Eight months after that — having spent about two years trying unsuccessfully to create the Gadzookery app — Mr. Brooks took a hard look at the commercial cleaning market.
“It was a $51 billion industry,” consisting mostly of small firms, he said. Mr. Brooks saw an opportunity. Hacker Dojo’s management agreed to give him a one-month advance to buy the equipment and supplies he needed to start, and in 2015 he started Squiffy Clean. There are about 100,000 firms in the commercial cleaning business in the country today, said John Barrett, executive director of ISSA, a trade association for the global cleaning industry. The 50 largest companies account for about 30 percent of the revenue, according to an industry report published by Dun & Bradstreet, leaving the other firms plenty of room to capture customers.
More than 90 percent of janitorial services companies are sole proprietorships, according to a report from the industry research firm IBISWorld. But the greatest turnover is at the start-up level, Mr. Barrett said.
“The churn is unbelievable,” he said. So far Mr. Brooks has avoided that churn. Six months after he began, he was earning enough to move his business out of Hacker Dojo and into an office in Palo Alto. His company is unusually high-tech for the industry. It collects more than 700 points of data, like the time it takes to mop a square foot, and uses the information to improve and refine its cleaning methods, and to set prices. “We have a client with an 8,000-square-foot building and we dove into the data and made changes to how the cleaning is done, such as combining certain tasks or changing the order in which they are done, and saved $600 in monthly labor costs,” Mr. Brooks said. “Margins in the industry are so low that we have to shave off every bit of labor we can.”
Most small cleaning companies charge by the number of labor hours, but Squiffy Clean created an algorithm that sets prices based on the data it collects about cleaning sites. The company is also developing a technology to prevent fraudulent workers’ compensation claims. It will use data to help determine whether an incident occurred. Mr. Barrett at ISSA says although large companies in the contract cleaning business use high-tech methods, it is far less common among smaller firms.
Compared with other office cleaning companies, Squiffy Clean generally pays a higher hourly wage (about $17 per hour). The median hourly wage in the industry is $11.27, according to the Bureau of Labor Statistics. It also gives cleaners equity in the company and makes their safety a top priority. The residential cleaning service Handy, for example, was sued in 2014 by two of its former house cleaners, who accused the company of a variety of labor law violations.
Starting any business, regardless of the technology, is difficult — and even more so when the founder is homeless. But Mr. Brooks was physically and mentally healthy and had the support of Mr. Maloney and others at Hacker Dojo. One of Squiffy Clean’s first clients was Singularity University, a Silicon Valley think tank and start-up accelerator. “A lot of people view janitorial work as just a way to make money, but Simon embraces it as the very important job it is and takes a very scientific approach to it,” said Tom LeGan, the facilities manager at Singularity. “He’s also very compassionate about his workers. You don’t see that in many corporations, let alone a janitorial services company.”
Mr. Brooks still faces many of the same difficulties as other Bay Area start-ups, including a tight labor market. “We are all trying to attract the best engineers and the cleaning industry is not sexy, so it’s tough,” he said. Whatever the challenges, he said his life had been improved by entrepreneurship. He no longer lives in his car and has moved into an old 34-foot recreational vehicle. When he gets home, he is grateful just to have a shower and a bed. “I’ve lived in vehicles for so long I’ve gotten used to it,” Mr. Brooks said. “And this is a whole lot better than a car.”
Wednesday, February 15, 2017
Edison Energy to Conduct Energy Audits and Retro-Commissioning Projects for New York City Operated Buildings
ENERActive Solutions, an Edison Energy company, today announced that it has been chosen by the New York City Department of Citywide Administrative Services (DCAS) to conduct audits and retro-commissioning projects on municipal buildings throughout New York City. ENERActive’s consultation will ensure that DCAS complies with New York City’s Local Law 87 (LL87), which requires buildings over 50,000 gross square feet to undergo periodic energy audit and retro-commissioning measures to help building owners and managers measure and develop an action plan to save energy.
“It is an honor to partner with DCAS on this very exciting and important project in the initial phase of audits and recommendations,” said Dan Weeden, president and CEO, ENERActive Solutions. “Our mission is to offer solutions that will ensure compliance with LL87 and provide forward-looking plans that will allow these important facilities – such as schools, public transportation depots and hospitals – to utilize energy in a more efficient manner, positioning them to be more sustainable for years to come.”
ENERActive will perform a thorough assessment of each building’s energy portfolio, allowing the company to advise DCAS on the optimum solutions for energy improvements through replacement and upgrades, as well as installation of new technology and implementation of renewable energy projects. The company will also offer guidance related to optimization of current equipment and operations, verifying that existing equipment meets current energy needs and providing staff training to ensure plans can be properly implemented and overseen.
New York City is on a path to reduce citywide emissions by 80 percent by 2050. Public buildings are required to lead by example and reduce emissions from government buildings by 35 percent by 2025, as outlined in New York City’s sustainability plan, One City, Built to Last. Assessing the energy use of the city’s buildings and making the necessary changes or upgrades to infrastructure is a key step towards meeting these targets, as most buildings consume an average of 30 percent more energy than is needed to operate. ENERActive’s consultation and solutions are effective at cutting energy use and quick to implement, therefore critical to meet the urgent 35 percent reduction by 2025.
For more information about Local Law 87 and the City’s progress in meeting its sustainability goals read our blog:
Monday, February 13, 2017
Energy-efficient buildings have lower operating costs, but also tend to command higher rents and enjoy higher occupancy and tenant retention levels than traditional buildings. A recent Energy Efficiency Survey, developed by the Institute of Real Estate Management (IREM) in collaboration with the Institute for Market Transformation, looked at what motivates office building owners to improve energy performance. The survey focused on how financial methods used to evaluate capital expenditures impact decisions to invest in improving energy efficiency.
IREM and the Building Owners and Managers Association (BOMA) distributed the survey to their members and received 307 responses, which represented 1.7 percent of the total survey distribution. The survey found that most respondents use simple payback calculations to evaluate energy efficiency projects, usually basing decisions on recovering the investment in one to two years. The study revealed that this simple payback does not capture the full benefits of energy efficiency, like Net Present Value (NPV) analysis, which incorporates potential revenue increases from higher rental income.
The survey also found that building owners are more inclined to invest in energy-efficiency improvements if they can charge higher rents, particularly in split-incentive situations, where energy-cost savings accrue solely to tenants. Split incentives had posed a barrier to investing in improving energy efficiency, but this was overcome with the “green lease,” which requires tenants to participate in energy and water conservation programs.
Additionally, the survey noted that while the property manager is responsible for the building’s everyday energy management, the asset manager usually makes the final decision on whether to invest in improving energy performance. When third-party managers have authorization to make capital expenditures it is usually a small dollar amount of $25,000 or less. But that authority exists “almost not at all,” according to Brenna Walraven, founder/CEO of Corporate Sustainability Strategies Inc., which provides sustainability strategy development and execution plans.
CBRE’s Global Director of Corporate Responsibility David Pogue notes he is surprised IREM’s study focused on energy efficiency. “Energy efficiency was a singular topic a decade ago, when everyone began getting buildings Energy Star-certified,” he says. Pogue was less surprised by the low rate of survey respondents, which he suggested is an indication that people viewed the survey topic as old news.
When a 2009 study of 150 Energy Star buildings in 10 markets revealed that these buildings were commanding rent premiums of three to five percent and enjoyed high occupancy levels, landlords of class-A office buildings got on board, but those with lower quality assets did not necessarily. Today most of the office sector has broadly adapted green practices, though not every building is necessarily certified by a green-rating system, Pogue says.
The 2016 Green Building Adoption Index study by the CBRE Group Inc. and Maastricht University showed that the rate of growth in ‘green’ building has slowed, rising from 39.3 percent in 2014 to just 40.2 percent last year, but adoption of green building practices in the 30 largest U.S. cities continues to be significant.
“While the rate of growth in ‘green’ buildings has slowed modestly, our latest study underscores that in most major markets, sustainable office space has become the ‘new normal,’” Pogue notes. The study reported that 11.8 percent of U.S. office buildings, representing 40.2 percent of office space, have been certified by either the U.S. Green Energy Council’s Leadership in Energy and Environmental Design (LEED) or the U.S. Energy Department’s Energy Star program.
Pogue adds, however, that nearly 40 percent of high-profile office buildings in core urban markets are green-certified because they have to be green to compete. Those buildings tend to attract high-profile tenants, who demand a high-performance building environment.
LEED rates a building’s impact on the environment, but Pogue points out that the next level of certification, Delos Living’s WELL Certification, rates a building’s impact on occupants. The WELL Building Standard places health at the center of indoor design, incorporating healthy ideas based on seven concept categories: air, water, nourishment, light, fitness, comfort and mind. http://nreionline.com/property-management/what-drives-investment-building-energy-performance