Efficiency for the Future

Gerald D. Hines (BSME ’48) was a partner in Texas Engineering before founding Gerald D. Hines Interests, which is one of the largest real-estate firms in the world, with operations in the United States and 15 other countries. His recent gift of $2 million will support expansion of the university’s Ray W. Herrick Laboratories. The facility’s Gerald D. Hines Sustainable Buildings Technology Laboratory will focus on new building technologies and their impact on human behavior and productivity.

I grew up 100 miles north of Purdue in Gary. Steel was the lifeblood of the city, and even if you didn’t work in steel, your well-being depended on it. The city was thriving and progressive for decades, until competition in steel heightened in the 1960s. Business collapsed, depression set in, and the city suffered for as many decades hence as it enjoyed until that point.

By that time, I had completed a stint in the Army, graduated from Purdue as a mechanical engineer, and moved to Houston in search of opportunity. I started my real-estate firm in 1957 and grew it patiently until I had my first big break in the late 1960s with a contract with the Royal Dutch Shell Company. I had successfully persuaded them to let me build a 51-story office tower for their North American headquarters.

Much time has passed since then, and the world has digitized, globalized, and been made flat again. By and large we are a more prosperous world, but places like Gary, which is the home of four Superfund sites, remind us that our actions reverberate far into the future.

With all of our notable accomplishments, one of the consequences of rapid human progress is the harm done to our communities. The great news is that there is a groundswell of support for not only modifying old behaviors but also for remedial action. If you have read a newspaper or watched your local news lately, you might have seen or heard the word “sustainability.” In fact, you have probably seen more about “green” in the media than “Change We Can Believe In.” Everyone is greening everything, from their frequent flier miles to their toothbrushes, and that’s a great thing.

But in business, sustainability has become one of those phrases like “value-added” or “synergy.” People recognize the marketing value of these statements and use them gratuitously. Sustainability, like these words, has real meaning, however, and an important place in business language—especially now. Companies have to reconcile their marketing gimmicks with impending legislation on carbon emissions and truth in advertising. They are realizing that green is not a device but an approach to business. In fact, for the authentic leaders, sustainability is a guiding principle and a quality that aspires for the organization.

One of the most important technical values I learned at Purdue was efficiency. It may be the most basic virtue in mechanics, but it was an axiom that catapulted my firm from an average real-estate shop to what I believe is the most sustainable real-estate organization in the world. As an engineer turned developer and building owner, I paid special interest to the systems in my buildings and how efficiently they ran. It was a natural advantage I had over businessmen, financiers, and even leasing experts. But I was a businessman, too, and I realized that every dollar of expense was a dollar off of my bottom line.

For example, Shell’s headquarters in Houston was my first major office tower and my first significant achievement in sustainability. By raising the floor-to-floor height above market standards, we were able to install flexible, low-pressure ductwork that resulted in reduced operating expenses. More than 50 years later, One Shell Plaza remains a leader in energy efficiency and holds the ENERGY STAR® label.

In the 1990s, Hines Interests earned recognition for its leadership in energy efficiency and new building technologies. We partnered closely with ENERGY TAR, a joint program between the Environmental Protection Agency and the U.S. Department of Energy. And we were invited to take an active role in the formation of the U.S. Green Building Council’s (USGBC) LEED® program for sustainable design.

Green has reached maturity in real estate, at least as far as acceptance goes. More than 25,000 people were expected to attend the 2008 USGBC’s Greenbuild conference in Boston. Instead of just jockeying for the highest rental rate, real-estate companies are now competing to create the most sustainable office environment, which in turn raises rental rates. We are evolving business to place appropriate value on each part of the triple bottom-line: people, planet, and profit.

This means good things for cities like Gary, Houston, and London (my current hometown). Each of these places has a significant industrial past, but they also have a much brighter and cleaner future thanks to greater awareness, accountability, and integrity. Each day, more people are coming to terms with the life-cycle impact of their decisions, and they are striking a balance between today’s needs and the ability to meet tomorrow’s.

In the end, efficiency may not be the exclusive domain of engineering. It seems it may be the key to a sustainable human existence, as well.

-Gerald D. Hines