Syska Hennessy, Third Millennium Offer Building Performance Auditing

Engineering firm Syska Hennessy Group and real estate investment and management firm Third Millennium Group launched a “holistic auditing program” for Third Millennium properties. Syska is the service provider and Third Millennium is the client. 

The program “measures four aspects of building performance: indoor air quality, building automation systems and telecommunications infrastructure, sustainability, and execution (workflows and use of data).”

Third Millennium describes itself as a “private firm dedicated to investing alongside corporations and private funds in the purchase, management, and growth of real estate portfolios and corporate buy-outs.”

Syska provides the actual auditing team with “experts in building automation systems, sustainability, and facilities management.” The engineering firm has a 94-year history with 500 employees across 19 offices and describes itself as specializing in “MEP [a term for mechanical, electrical, and plumbing], information and communication technology (ICT), and commissioning for the government and commercial sectors.”

“The team conducted inaugural audits at two Third Millennium commercial properties in Chicago — 540 West Madison and 300 South Riverside. Third Millennium, which shared the resulting ‘scorecards’ with tenants, plans to repeat the process with Syska every year,” according to the release.

Globally, most CRE investors see ESG as crucial. “Environmental, Social and Governance (ESG) considerations, particularly environmental ones, are prominent on the investor agenda, with three quarters of investors integrating environmental factors into their strategies,” said a report from Colliers at the end of 2021.

“I think there’s a general misunderstanding that the US-based investors are less concerned about ESG, and our survey suggests that is not the case,” Aaron Jodka, director of research US capital markets at Colliers, told GlobeSt.com back in December. “The building environment is a contributor to the broader market and real estate investors are paying attention to that. Their investors are also looking at that, whether it’s a pension fund or other types of institutional investors. It matters. Our survey showed that we’re still playing catchup on ESG-specific investing in the US, but environmental factors are now playing a part in the majority of asset performance reviews.”

In addition, there’s been concern in CRE about ESG disclosure regulations that the SEC will eventually mandate.

The scorecards that Third Millennium shares with tenants likely help provide some of the environmental factors, like energy and water use in buildings, that might be necessary for reporting.

Ultimately, the auditing and tracking requires extensive use of technology. “Building operations today is a holistic enterprise,” the release quoted Syska senior associate Christian Nazon. “Energy tracking, for example, integrates with IoT applications. It’s important to measure not only the quality of systems and infrastructure, but also the quality and depth of integrations.”