How a Real Estate Portfolio Achieves Net Zero

A solar system on the roof of the Kilroy Realty Corporation in Los Angeles.

A mix of technologies helps energy-saving pioneers lower their carbon profiles.

When ULI Greenprint set the goal of being net carbon free by 2050 for its collective membership, it was clear that a real estate portfolio would have to employ a combination of technology and innovation to achieve this goal.

Two members of ULI Greenprint have already achieved the net zero carbon target: Hudson Pacific Properties, a real estate investment trust (REIT) with 1.8 million square feet of office and studio space, and Kilroy Realty Corporation (KRC), a REIT the west coast with an office and life science area of ​​over 1.3 million square meters. That’s how they did it.

Hudson Pacific

  • Energy efficiency: Real-time monitoring systems, LED lighting, frequency converters and retrofitting of devices improve efficiency.
  • Renewable energies on site: As far as possible, traditional solar modules are used on the roof, as well as pilot technologies such as integrated photovoltaics – solar modules that are built directly into the facade.
  • External renewable energies: Many properties get carbon-free electricity from local utility companies such as CleanPower SF, Hetch Hetchy Power, Peninsula Clean Energy, and Silicon Valley Clean Energy.
  • Renewable Energy Credits (RECs): By purchasing loans from a Texas wind farm, the company converted all of the electricity it owned into 100 percent renewable sources.
  • CO2 compensation: The remainder of the company’s greenhouse gas emissions are offset by verified emission reduction credits from a landfill gas energy project in Illinois. The resulting carbon offsets are certified according to the Verra Verified Carbon Standard (VCS).

Kilroy Realty Corporation

  • Energy efficiency: The company has reduced the energy consumption of its assets by approximately 18 percent compared to 2010, in part thanks to efficiency projects carried out as part of the Kilroy Innovation Lab.
  • On-site solar and batteries: Kilroy installed solar photovoltaics on 15 of its properties with a total output of 5.6 megawatts, which corresponds to around 2 percent of the total energy consumption of the KRC portfolio in 2020.
    KRC has eight battery storage systems with a total output of four megawatts.
  • External renewable energies: KRC has entered into an agreement for a large external solar array under development which, when completed, will fully cover the power consumption of its directly managed properties. In addition, KRC sources 100 percent Green-e certified electricity (as determined by the Center for Resource Solutions) for certain properties from several of its energy providers, including the Clean Power Alliance, San Diego Gas & Electric, and Peninsula Clean Energy.
  • RECs: Although not completed, the off-site solar project is acquiring KRC RECs on behalf of the company, allowing KRC to convert all properties to 100 percent renewable electricity.
  • CO2 compensation: The remaining greenhouse gas emissions are offset by various emission reduction credits. The resulting carbon offsets are VCS certified.

Innovation in building operations

Kilroy Innovation Lab innovates to improve portfolio performance and rapidly transform the larger commercial real estate market. KRC expects a return on its investment through reduced operating costs.

The company is partnering with accelerators such as Elemental Excelerator to reduce the risk associated with technology selection, identify the best companies to implement pilots, and scale technologies across the portfolio.

Hudson Pacific plans to expand the use of sustainable technologies to further reduce carbon from operations, including through its existing partnership with Fifth Wall, the largest venture capital firm focused on technology-driven innovation for global real estate. Fifth Wall real estate investors employ new technology and benefit from partnerships, integration, contracts and distribution agreements.

As the cost and effectiveness of renewable energy systems improve, the price of green power falls, and technology advances, the market is poised to increase the appetite for climate-neutral portfolios.