What Are The Costs and Benefits of Innovation Within ESG? with Jonathan Flaherty & Philippe Le Fort

Summary: In the fifth episode of season 10 of The Propcast, host Louisa Dickins is joined by Jonathan Flaherty, Global Head of Sustainability and Building Technology Innovation at Tishman Speyer and Philippe Le Fort, leader of Ambio, a smart buildings SaaS platform by PATRIZIA.

Jonathan and Philippe talk to Louisa about their journeys into ESG and elaborate on the technologies they believe will help real estate reach net zero. They discuss the differences in innovation adoption across geographies and the long term benefits and cost of innovation on the asset, the tenant and on our built environment.

Philippe talks about how he’s been leading PATRIZIA’s very own smart building SaaS platform, Ambio, and both guests share their thoughts on whether full digitalisation is actually possible.

Resources:

• LMRE Global Recruitment and Search Consultancy
• LMRE YouTube Interviews
• Ambio, PATRIZIA’s Smart Building Platform

 

Key Insights From This Episode:  

• I don’t think one particular technology is going to drive us to low carbon buildings, it’s going to be a combination of everything working together to get that outcome. - Jonathan
• People will go back to offices in the future but people need to have a reason to do so, and the traditional office product is going to have to change.The buildings that don't make that change are going to become obsolete. - Jonathan
• Customer experience is really significant to the focus of companies such as Amazon and Apple. Real estate has not paid much attention to that up until now, however technology is now coming to change the way people operate and the way people use buildings every day. - Philippe
• I think we're living in one of those moments where all these mega trends are converging together and really accelerating how we have to adapt as an industry. - Philippe
• Is any of this digitalisation really possible within a brick and mortar business, which is so large, slow moving and slightly archaic? - Louis

 

About Our Guests:

Jonathan Flaherty:  

Jonathan Flaherty is the Global Head- Sustainability and Building Technology Innovation at Tishman Speyer. Mr. Flaherty joined Tishman Speyer in 2007 as part of the Leadership Development Program and has held various roles with the company, including in asset management and portfolio management for New York. He transitioned to the Sustainability department in 2010, becoming the Director of Sustainability, and most recently the Global Head – Sustainability and Building Technology Innovation. In this role, he manages the firm's evolving sustainability strategy: property and fund sustainability certifications, communication with current and future investors, worldwide performance tracking, energy procurement strategy, building technology innovation, diligence in alternative green investments, and execution of the firm's commitment to Net Zero by 2050. Prior to joining the firm, he worked as a legislative aide for Senator Schumer in Washington, DC. Mr. Flaherty is the chair of the board of directors for the Building Energy Exchange, the co-chair of the REBNY Sustainability Committee and is on the board of the New York Energy Consumers Council. He holds a BA in political science from Kenyon College, and an MBA and MSUP from Columbia University.

 

Philippe Le Fort:

Philippe Le Fort leads Ambio, a smart buildings Saas platform by PATRIZIA. Philippe joined the company in 2020 and has been in charge of setting up a new business line from the ground up. Today he is leading its execution and responsible for deploying the technology at scale across the portfolio, advancing how buildings perform for businesses, people and the planet. 

Previously, Philippe was an Investment Director at Tishman Speyer London and started a proptech venture to democratise access to institutional grade real estate using blockchain technology. He has also advised early-stage companies in the U.S. 

Philippe has a MSc in architecture from EPFL and an MBA from London Business School. He lives in London.

 

About Tishman Speyer:

Tishman Speyer is a leading owner, developer, operator and investment manager of first-class real estate in 32 key markets across the United States, Europe, Asia and Latin America. We develop, build and manage premier office, residential and retail spaces for industry-leading tenants, as well as state-of-the-art life science centres through our Breakthrough Properties venture. With global vision, on-the-ground expertise and a personalised approach, we are unparalleled in our ability to foster innovation, quickly adapt to global and local trends and proactively anticipate our customers’ evolving needs.  By focusing on health and wellness, enlightened placemaking and customer-focused initiatives such as our tenant amenities platform, ZO., and our flexible space and co-working brand, Studio, we tend not just to our physical buildings, but to the people who inhabit them on a daily basis. Since our inception in 1978, Tishman Speyer has acquired, developed, and operated 512 properties, totalling 217 million square feet, with a combined value of over $126 billion (U.S.). Our current portfolio includes such iconic assets as Rockefeller Center in New York City, The Springs in Shanghai, TaunusTurm in Frankfurt and the Mission Rock neighbourhood currently being realised in San Francisco.

 

About PATRIZIA:

With operations around the world, PATRIZIA has been offering investment opportunities in real estate and infrastructure assets for institutional, semi-professional and private investors for 38 years. PATRIZIA manages more than EUR 55 billion in assets and employs over 1,000 professionals at 28 locations worldwide. Through its PATRIZIA Foundation, PATRIZIA is committed to social responsibility. The Foundation has helped around 250,000 children in need worldwide gain access to education and thus, has given them the chance of a better life over the last 21 years. You can find further information at www.patrizia.ag

 

About Our Host

Louisa Dickins

Louisa is the co-founder of LMRE, which has rapidly become the market leading global PropTech recruitment platform and search consultancy with operations across North America, United Kingdom, Europe and Asia-Pacific.

To promote the industry she is so passionate about, Louisa set up the Global podcast ‘The Propcast’ where she hosts and invites guests from the built environment space to join her in conversation about innovation.

About LMRE

LMRE is globally recognised for leading the way in Real Estate Tech & Innovation talent management.

From the outset our vision was to become a global provider of the very best strategic talent to the most innovative organisations in PropTech, ConTech, Smart Buildings, ESG, Sustainability and Strategic Consulting.

At LMRE we are fully committed at all times to exceed the expectations of our candidates and clients by providing the very best advice and by unlocking exclusive opportunities across our global network in the UK, Europe, North America and Asia-Pacific.

Timestamps:

[2:10] Jonathan: Talk us through your role and journey into ESG and how you and Philippe first met each other?

• I have been at Tishman Speyer for 15 years this week. I started as an intern in the designing construction compartment before ending up in the sustainability department.
• Philippe was based in our London office and we ended up on a whole bunch of projects together.
• At the time when I joined the department in 2011 it was a much different world and sustainability was a much smaller corner of the universe. However, I thought it would be an increasingly important force in the future.

[4:26] Philippe: Talk us through your role at PATRIZIA and how it has changed? Could you also give us an introduction to your SaaS solution product, Ambio?

• I joined PATRIZIA about 2 years ago in the tech innovation team with the mission to improve operations, reduce carbon footprint and improve experiences within buildings through technology. The topic has been accelerated over the last couple of years by the demand for ESG products and for better data throughout the industry 
• We started from the fact that we needed to understand our buildings better, understand how good the tech infrastructure was and how good it needed to be. We soon realised that there was no such tool in the market that did that and we had to build one, that's how we started Ambio which we have just launched.
• Ambio involves doing health checks of buildings, identifying opportunities to add value by using technology to smarten things up and working with suppliers in the market to connect them to our investment managers so that we cover the entire spectrum of digital transformation and decarbonisation. 

[6:30] Jonathan: What is the major factor for pursuing ESG at Tishman Speyer?

• The biggest driver for Tishman Speyer has been the long term equity of the business, investors would like to know that 10 years from now the building they’re buying today will retain its resale value and will still be leasable after future regulations have come into place.
• When buying buildings now you need to be thinking about the owner after you and that owner is going to have it when all of the regulations related to decarbonisation and low energy are going to hit across the world. 

[11:20] Philippe: What’s the big focus of PATRIZIA in terms of pushing forward on smart buildings?

• On one hand you have more demanding capital, and on the other hand the increasing expectations from tenants which is moving the needle of what people want in terms of space.
• Customer experience is really significant to the focus of companies such as Amazon and Apple. Real estate has not paid much attention to that up until now, however technology is now coming to change the way people operate and the way people use buildings every day. 
• All these mega trends are converging together and really accelerating how we have to adapt as an industry. Covid has been a very big booster and we’re still trying to figure out the implications of that, because there is a lot of elasticity in the market.

[14:02] Jonathan: Can you explain what you mean by a haircut on exit and how this can be avoided?

• A building should be worth a particular number upon exit based on the rents that you're getting in that building, if the market is valuing your product below that then it is below the logical value that the market is assigning to other buildings.
• You need to predict what the market is going to look like in the future, most leases last for 10 years, so buying a building now you need to be thinking about the market and the regulations in 2032. 

[18:30] Philippe: Can you tell us more about the technologies PATRIZIA are utilising to help maximise an asset value?

• Heating and cooling a building is one of the biggest energy buckets in commercial buildings, so a technology that tracks the weather is really important.
• Another technology we are looking at is predictive maintenance in lifts, predicting when a lift is going to break saves money on lift management contracts.
• Since the pandemic, people are much more conscious of the air quality in buildings. Also, to help people that are coming back into offices be healthy and productive, we need to ensure the air quality is good with regards to the CO2 concentration affecting brain productivity.

[22:11] Jonathan: Is there anything you would like to add in terms of which technologies Tishman Speyers are using?

• Indoor air quality has been a big focus and will continue to be, but if anything that's more monitoring than a technology and has been around for a while. 
• I don't think one particular technology is going to drive us to low carbon buildings, it’s going to be a combination of everything working together to get that outcome.

[23:59] Jonathan: what can we do to get these brick and mortar businesses on board with technology adoption and ESG?

• Our primary focus is office buildings, we don’t see the end of an office but that the office product needs to transform into something that is much more focused on digital, hospitality and low carbon. The changes in offices are very large and are coming at a rapid rate.
• People will go to offices in the future but people need to have a reason to do so and the traditional office product is going to have to change, the buildings that don't make that change are going to become obsolete.

 

L – Touch on the main lessons you have learnt throughout your career.

Jonathan - You never know where your career is going to go, you have to be ready for twists and turns. There are so many opportunities out there so allow yourself to be flexible.

M - Please give a mention to anyone / product / service.

Philippe - I’d like to mention Ambio and the team who have worked really hard to launch the product.

R – What has been the most  rewarding  aspect of working in PropTech?

Jonathan - It is enormously rewarding working in PropTech and sustainability, it is full of fascinating people doing really interesting work around the world.

E - What are you excited about in the future of sustainability and smart building?

Philippe -  I like it when things are not so straightforward, PropTech and ESG are creating dislocation and value add opportunities in our industry which is really exciting.

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