With LED lighting at the forefront, the real estate investment trust (REIT) has completed retrofit projects at more than 150 of its sites throughout the United States. Adapting to lessons learned and solid results propel the firm’s focus.
Nate Mitten, senior manager of property standards & improvements for Kimco Realty describes the program.
By Facility Executive Staff
From the April 2017 Issue
What were the motivating factors and goals for this project?
Kimco’s Illumi-Nation LED lighting program is a key component of the company’s vision for best-in-class shopping centers, reducing maintenance and energy costs while increasing the safety and curb-appeal of our properties. Officially launched in early 2015, this multi-site exterior LED retrofit program took shape as a natural extension of our web-based lighting controls initiative that had been our first venture into portfolio-level retrofits. The early success and positive feedback from tenants quickly thrust the program into a spotlight position both internally and within the larger real estate community. Three consecutive years of recognition by the LEEP Campaign has also confirmed we are moving in a great direction. [Editor’s Note: LEEP (Lighting Energy Efficiency in Parking) encourages commercial building, parking lot, and garage owners and managers to reduce energy use with high efficiency lighting technology in parking lots and structures. Supported by several industry groups, the campaign’s technical advisor is the U.S. Department of Energy.]
The original motivation of the Illumi-Nation program was anchored primarily in cost savings and sustainability, but it has been intriguing to watch how the benefits of the lighting quality provided by LED fixtures have taken center stage. Once our leasing team, tenants, and shoppers experienced the visual appeal, sense of security, and color enhancement, they wanted more. Cost savings and sustainability benefits continue to help justify the projects but the qualitative benefits have become primary drivers. Now many retail tenants expect both the visual and economic benefits of LED lighting in the common area. The conversation has largely shifted from “if LED” to “when LED”. By the end of this year, we will have performed retrofits at 225 of our 524 properties with a goal of upgrading the rest by 2020.
How did you determine the best approach?
To assess our properties and prepare for a significant volume of potential projects, we hired a professional firm to conduct standardized lighting assessments. We also worked with them to develop standardized design criteria and evaluate a host of manufacturers and products. By mid-2014, we had performed hundreds of site surveys with each report, including full photometric designs, fixture specifications, and a detailed budget proposal that gave each regional leadership team what they needed to push “go”.
Many pushed “go” indeed, and the demand rose from about 10 projects per year to over 90 budgeted projects heading into 2015. Most project scopes included retrofitting parking lot fixtures as well as building lighting, such as wall packs and canopy fixtures in many cases. Many included new pole locations in order to achieve light level and uniformity targets we had established. Some required local permitting and Title 24 compliance in California, adding further complexity. This was exciting but created a significant challenge—developing a program that could deliver excellent projects at an unprecedented rate.
It was determined we would coordinate projects out of our national operations team in Charlotte, NC and partner with our property managers to address issues in the field. We kicked off the program by competitively selecting a national lighting services vendor who would serve as general contractor for each project. That vendor is On-Site Lighting & Survey, LLC, based in Buffalo, MN, and we continue to work with the firm.
We worked closely with this partner to develop a process that could deliver an average of three completed retrofit projects per week, for 30 weeks. In order to maintain consistency, leverage buying power, and achieve scale we handled project management, design, material selection, and purchasing centrally through our national partner. For installation and site work, we tapped into a large, cost-competitive, and skilled labor force by running labor bids with the same local contractors and electricians that had been servicing our sites for years in many cases. This hybrid process, blending national and local expertise, was continually refined. By the end of 2015, we had substantially completed our first batch of 89 projects.
Did your staff undergo training to implement and maintain the new equipment?
In 2016, the program matured greatly as 62 more projects were completed and lessons learned from our first year were incorporated. With the structure of the program successfully developed, our national operations team stepped back, and regional teams took over direct oversight of each project. Our directors, property managers, and property assistants did a fantastic job working with our national partner and installers during each project to finalize the design and scope and then addressing any issues that arose. Some factors in this success were training webinars early in the year, standardized administrative procedures, and weekly status calls with each of our six regional teams. The growing knowledge and experience of our regional installers was also helpful in identifying and resolving potential electrical and fixture mounting challenges, tenaciously working with cities to obtain permits, and keeping sites safe and clean during each installation.
What have the results been? What is ongoing maintenance like?
Our tenants are “thrilled” with the new lighting and tell us that their customers feel safer and more secure coming to our centers at night. We have accomplished energy savings in the range of 30-40% on average but find it varies significantly depending on the type and age of the existing lighting system. Maintenance savings are commonly in the range of $5,000 to $10,000 per site depending on size of property and age of the existing system. Maintenance costs will remain low as we take full advantage of the labor and material warranties administered by our national partner.
What are next steps for the program?
We will continue our focus on parking lot and building lights, but we are also expanding program scope and benefits. For instance, decorative LED lighting is being incorporated into more projects, including decorative fixtures at entrances, along drive lanes, and over walkways. Flood lighting, accent lighting, and landscape lighting are used increasingly to add curb appeal. A department-wide webinar was held late last year to offer guidance to property managers on seeking decorative design concepts. We are also looking to advance our lighting controls program beyond zone-level control to the fixture itself. By plugging a wireless control node into each fixture’s preconfigured receptacle, we can enable motion sensing and dim each fixture independently.
We have more than 70 additional projects in the pipeline for this year. Success has been validated by the numbers and by tenant and customer feedback. We plan to build on momentum, adopting the best technologies and continually enhancing our shopping centers.
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