CoolSys Acquired by Ares Management Corporation

Leading Refrigeration and HVAC Services Company to 

Continue Operations Under Current Executive Team 

 

BREA, Calif., March 21, 2019 – CoolSys™, a parent of market-leading refrigeration and HVAC companies nationwide, announced today that is has been acquired by a fund managed by the Private Equity Group of Ares Management Corporation.  CoolSys will continue to operate under its current executive team, which will collectively maintain a significant equity investment in the company.  Financial terms of the private transaction were not disclosed.

 

“This is a major milestone for CoolSys,” comments Adam Coffey, CEO of CoolSys.  “We are grateful to our former private equity partner, Audax Group, for supporting the execution of our growth strategies during the past three years.  Now, with Ares’ additional support and resources, we can pursue a more aggressive acquisition and expansion strategy while we continue to deliver best-in-class solutions for our customers’ mission–critical refrigeration and HVAC systems throughout North America.” 

 

Over the past three years, CoolSys has undergone transformative growth with eight acquisitions to expand its presence and reinforce its service capabilities in key geographic markets across the U.S., earning the company recognition as one of the top 10 fastest-growing private companies in Orange County, Calif. by the Orange County Business Journal.  The company plans to continue its growth organically as well as through strategic acquisitions following its partnership with Ares.  To accommodate its growing operations and staff, CoolSys expanded into a 27,000 square-foot headquarters in Brea, Calif. in December 2017.  The company currently employs a team of more than 2,000 employees nationwide and is in active discussions with several potential acquisition targets. 

 

“CoolSys is the recognized leader in the fragmented refrigeration & HVAC services market. We are impressed by its rapid growth, blue-chip customer portfolio, expanding set of customer solutions, highly capable leadership team, and strong employee-centric culture,” comments Matt Cwiertnia, partner, and co-head of North America Private Equity of Ares Management.  “We look forward to partnering with CEO Adam Coffey and the entire CoolSys management team to accelerate growth both organically and through add-on acquisitions.”

About CoolSys 

CoolSys is the market-leading refrigeration and HVAC services company, specializing in a full spectrum of best-in-class service experiences and solutions for customers in the retail, food service, commercial and industrial market segments. CoolSys and its operating businesses cover every stage of mission-critical systems through engineering and design, installation, service and maintenance, and energy optimization. Headquartered in Southern California, CoolSys has more than 1,400 highly trained, field-based service and installation experts serving the daily needs of more than 4,000 customers across North America. For additional information, please visit www.coolsys.com.

About Ares Management Corporation

Ares Management Corporation is a publicly traded, leading global alternative asset manager with approximately $130.7 billion of assets under management as of December 31, 2018 and 18 offices in the United States, Europe, Asia and Australia. Since its inception in 1997, Ares has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares believes each of its three distinct but complementary investment groups in Credit, Private Equity and Real Estate is a market leader based on assets under management and investment performance. Ares was built upon the fundamental principle that each group benefits from being part of the greater whole. For more information, visit www.aresmgmt.com.

Member Profiles

Maintenance Specialist, Construction, PacSun

Take us on the journey of your career path. How did you end up where you are?

I began my career in retail starting with Customer Service in the General Office at Saks Fifth Avenue. I had many great opportunities to learn different skills through the years, including sales auditing, inventory management, associate training and being a Sales Manager of various departments. I became Assistant General Manager of Operations (AGMO) at Off5th and learned a great deal about running a store. While there, I found that I really liked managing facility maintenance. I transferred back to the Saks Fifth Avenue store as a Sales Manager of Shoes and Handbags, Jewelry and Men’s departments. The opportunity came again for AGMO, and this time the Facilities Manager was one of my direct reports. We would meet daily to review repairs/maintenance and projects in the store such as shop installations, LED/IT upgrades and store remodeling. I worked with Corporate PMs, Store Design and general contractors and loved the process and results. When the opportunity came from PacSun, I was eager to embrace facilities at a corporate level to work with all stores. My background taught me the importance of store experience for the customer and empathy and understanding of environment for the associates as well. 

What’s a typical day like for you? 

First thing, I check my phone for texts and emails to see if anything needs immediate attention before the commute or if it can wait until after I get in to the office. I organize priorities by hour, day and week, check ongoing project timelines, keep my email and ServiceChannel dashboard open all day and have weekly vendor and construction meetings. Before I leave for the day, I check to see if we have any overnight projects and make sure my phone is charged! I am always available for the stores and business partners. 

What advice do you have for someone just starting out?  

Be organized, because there is a lot going on and priorities can change quickly. Learn to put out fires and remain calm! Remember to always be a good business partner because relationships are everything. You never know who you might need in the future and who might need you.

Why should someone be a PRSM member? 

I was so happy to know this organization existed! My first conference was such a great experience and it opened my eyes to the facilities maintenance world. PRSM gives you a network of people that you can call on for service providers, ideas, advice and support. 

If you could describe the industry in a few sentences, what would you say? 

The facilities maintenance industry helps our businesses operate to the standards that we set for our companies. We are problem solvers and we help keep things working to make business happen.

 

Greg Fasullo

CEO, ENTOUCH Smart Building Solutions

Take us on the journey of your career path. How did you end up where you are? Where do you see yourself going?

I have been a technologist, an entrepreneur and a senior executive in the technology and energy industries since 1988. My first job was as an engineer for AT&T Bell Laboratories in New Jersey. I moved to Dallas in 1990 and since then have started two companies and restructured the AT&T business for a private equity firm. I’m currently running ENTOUCH, where we focus on automating multisite businesses and provide a “digital FM” capability for the facilities team. Our company is one of the fastest growing IOT software companies in the country, as we continue to expand services to new clients. I love the thrill of blazing a new path and working with talented people and expect to be doing this for a long time.

What’s a typical day like for you?

As an entrepreneur and executive, there really isn’t a “typical” day since our responsibilities are 24/7, while business fundamentally requires face-to-face interactions with our clients and within our organization. I’m fortunate to have a strong leadership team to manage the various elements of the business, from sales to engineering to operations. Much of my time is spent working with my leaders on strategy and tactics. 

What advice do you have for someone just starting out?

Always strive to do what you love. That isn’t always easy, even if you have a position that excites you. There will always be challenges. Successful people share the traits of hard work and persistence when faced with adversity. It will be easier to put in the hours and remain persistent if you have a positive outlook and love what you do.

Why should someone be a PRSM member? What are the benefits to membership?

PRSM provides multiple benefits to client members, from networking opportunities, to best practices, to the conferences. The world changes fast and we are all busy. Without an association like PRSM to elevate your thinking, you run the risk of not being exposed to new technologies and operational trends — and falling behind your competition. 

If you could describe the industry in a few sentences, what would you say?

We are on the cusp of dramatic change as an industry — the beginning of a massive transformation. Facilities management isn’t just about keeping equipment running and making sure the lights are on; it is about ensuring customer experience, organizational efficiency and bottom line profitability. Facilities leaders need to be experts in capital management, operational efficiency, human capital management and technology implementation. The businesses that succeed will depend on leaders who embrace and excel at these skill sets.

We’re discussing mixed-used spaces and pop-ups in this issue of the magazine. What are your thoughts on this trend?  How has this trend affected you personally?

Again, new formats, new utilization concepts, flexibility and adaptation to change are core to the future of facilities management. Leaders need to adapt quickly to changing consumer tastes and financial opportunities, and, most importantly, be prepared as the next trend is just around the corner. Stay educated, stay proactive and learn to adapt! 

Freedom to Give

PRSM Foundation, the philanthropic arm of PRSM Association, was granted tax-exempt status in September 2018. As a 501(c)(3) non-profit organization, any contributions made to PRSM Foundation in 2018 and going forward are tax-exempt to the full extent of the law. 

“I am thrilled the PRSM Foundation has been granted exemption status, as this is a major milestone in our journey to success,” said Brenda Villarreal, Executive Director, PRSM Foundation. 

PRSM Association was the first major donor to the PRSM Foundation, contributing more than $125,000. The PRSM Foundation Board of Directors plans to use the donation to establish the Foundation’s infrastructure, purchasing a donation management system, a website and establishing the Foundation programs. 

“We are very thankful for the PRSM Association Board’s generous support and its commitment to the PRSM Foundation,” said Bill Ackerman, Chair of PRSM Foundation Board of Directors.  

PRSM Foundation will host multiple fundraising events and activities during the PRSM2019 National Conference in Denver, Colorado. The second annual Golf Classic fundraising event will take place at TopGolf Centennial on Sunday, April 28, from 2–6 P.M. Regardless of your golfing skills, you are guaranteed to have a great time! During this event, the foundation will also conduct its first silent auction, which will continue throughout the conference until the Exhibit Hall closes on the last day. The PRSM Foundation is accepting in-kind donations for the silent auction — items such as sports memorabilia, travel related items, outings or experiences, gift certificates, etc., would be appreciated.

On Monday, April 29, from 8 A.M.–2 P.M., the PRSM Foundation Impact Committee will host the Charity Project at the Denver Volunteers of America Family Motel, a fully operational motel that provides services for homeless individuals and families. The motel reserves 30 rooms for families who receive a voucher from the City of Denver, while also offering 10 “respite rooms,” which help homeless individuals who need recuperation following a hospital stay. During this event, volunteers will help paint the facility and make small repairs.

Back by popular demand, the PRSM Foundation Headshot Lounge will be available at PRSM2019. Attendees can have a professional headshot photo taken by donating to the foundation. Group/company photos are also available and can be taken at supplier booths in the Exhibit Hall, by appointment only. This is a great way to recognize your team and support the PRSM Foundation. 

Looking to provide visibility for your organization and make an impact in the industry? The PRSM Foundation has several conference sponsorship opportunities available. For more information or to sponsor, email prsmfoundation@prsm.com or call 469-364-7589.

Thank you!

Special thanks to our 2018 Charity Project Host, Event Sponsors and In-Kind Donor Companies:

 

  • Benjamin Moore & Co.
  • Bonded Filter Co.
  • Branded Group
  • CBRE I FacilitySource
  • Commercial Fire, LLC
  • Facility Plus
  • Fexa
  • Global Facility Management & Construction
  • Grounds Control USA
  • Major Facility 
  • Solutions, Inc.
  • National Coating Solutions, Inc.
  • Onsite, Inc.
  • PPG Paints
  • PRSM Association
  • QSI Facilities
  • Renovia
  • S.A. Comunale Co., Inc. 
  • Sherwin-Williams 
  • Springwise Facility Management
  • Superclean Service Company, Inc.
  • Triangle Sign & Services, LLC
  • Veterans Worldwide Maintenance
  • Vixxo

Conserve Your Energy

Energy costs can be variable and developing a program to control — or even better, reduce — energy costs should be welcome by the key decision-makers in any organization. Facility managers (FMs) need to understand the best way to present such a proposal to management. PRSM’s new white paper outlines those steps in a clear and concise fashion. 

The first step involves understanding the perspective of the decision-maker. While an FM might have spent a great deal of time researching and refining a new energy proposal, this effort might not be top of mind for the decision-maker. Knowing this will help you understand why it might take some time for the decision-maker to absorb the details you are presenting before giving it the green light.

Second, the paper outlines the decision-making process management uses to evaluate multiple aspects of any change to business. The authors have broken the process into three categories: operational analysis, financial analysis and strategic analysis. An energy (or any) proposal presented by the FM should outline the operational benefits to the business, demonstrating feasibility as well as any operational impact. The proposal should also show an understanding of how a new energy plan is a strategic fit for the enterprise — for example, the change could allow the company to promote its eco-friendly credentials. And, of course, what the financial costs and savings will be.

The third step presented in the paper familiarizes the FM with financial terminology. This explains basic terms and concepts so you can draft your proposal with them in mind. For example, the saving-to-investment ratio, or SIR, is described as a different way to present ROI, or return on investment. Your proposal should include a statement projecting the total energy savings over the lifetime of the project, divided by the initial investment cost.

The white paper’s fourth step stresses the importance of timing. A critical part of your research into a new energy provider or new equipment (such as LED lighting or high-efficiency HVAC) should be investigating what incentives are available from the manufacturer, energy provider or government agencies and if there are deadlines to meet. There might be key deadlines that boost bonuses or offer savings on equipment or taxes, so draft a thorough timeline that makes the timing clear to decision-makers — they won’t want to leave any money on the table.

The fifth step reminds the FM that a proposal that has a “hook” has a better chance of succeeding. The hook would be some aspect of the new energy program — beyond saving money — that clearly demonstrates the value in terms the decision-makers can quickly grasp. An example included in the paper cites the number of items that would have to be sold at retail (25,000 $10 travel bags) to equal the energy savings. As long as the example is concrete and accurate, it should help make the case. 

Last, step six urges the FM to keep the proposal to one page. Presenting the key information in an easy-to-digest format shows you understand the value of the decision-maker’s experience, judgment and ability to make good decisions. Of course, you can — and probably should — have documents that back up your estimates, in case the decision-maker requests them.

The white paper includes two documents to help the FM structure the proposal. The first is a worksheet to calculate savings associated with the new proposal, and the second is a template to create a streamlined one-page proposal. 

Authors of the White Paper

Stephen Dixon and Sam McKnight are consultants with more than 30 years’ experience in energy conservation and systems design engineering. 

Read the PRSM white paper “6 Steps to Getting Energy Proposals Approved.” Visit https://www.prsm.com/Education-Resources/Resource/i/WP_6STEPSTOGETTING

 

Benchmarking for Success

In terms of member participation and trend identification, the PRSM 2017 Benchmarking Report was a success. Approximately 29 percent of PRSM’s retail companies and 20 percent of supplier companies responded. When the 2019 PRSM Retail Facilities Maintenance Industry Overview Benchmarking survey opens for participation in March and runs through June, PRSM hopes to take this success a step further.  

One-stop shop

Continuing the partnership with Dynamic Benchmarking, the 2019 PRSM Benchmarking Report is set to evolve. The biggest change PRSM Benchmarking participants will see in 2019 is the ability to quickly access the PRSM Benchmarking Tool. “One of the most important updates to the Benchmarking Tool for 2019 is that users will be able to log into PRSM’s benchmarking platform directly from PRSM’s website,” said Linda Xavier, Benchmarking Project Manager at Dynamic Benchmarking. “This streamlines the user experience by eliminating the need for separate username and passwords.” 

And not only will it be quicker, it will also be easier for FMs to access this data, too. “Our platform provides a one-stop solution for data collection, interactive peer comparisons and personalized reporting,” Xavier explained. “Immediately following data entry, users can compare their answers to the aggregated database of participants or to a subset of businesses they define using an intuitive filtering mechanism.” 

Unlike traditional written or digital surveys, these results can be available right away, complete with personalized reports. Users can decide what to compare and how to filter to get the results they want or need. “This interactive experience combined with the ability to have a continuously growing dataset as more users participate delivers a fundamentally different benchmarking process,” she said.

Accuracy and application

Once your company’s information is recorded, the next step begins: reading, understanding and using the data. Joe Bates, President of the Institute for Association and Nonprofit Research, explained the accuracy, actionability and dependability of the data collected by the survey. “What you’re doing here is taking aggregated data and using it to create a snapshot of what the industry is doing. From there, you can compare your organization with other responders,” Bates explained. 

Bates said there are three things to consider to ensure accuracy. “First, you must maximize your response rate. The more businesses who answer the survey, the more data you have, and the easier it is to identify trends. Second, you must make sure questions are asked properly. People answering the surveys can interpret poorly worded questions in vastly different ways, which skews the data. And thirdly, data integrity. Make sure data is verifiable after the responses are recorded. A bit of research into the companies helps purge inaccurate or misleading information.”

Bates and Xavier both brought up the importance of anonymity and aggregation of data collected. “To prevent the identification of a specific retailer or supplier, results are always aggregated and comparisons must meet minimum data requirements,” Xavier explained. Keeping your business’ tactics out of the hands of competitors is key. “You really don’t want to identify yourself to your competitors,” Bates explained, “That would give them quite the leg up when attempting to outmaneuver you in the business landscape.” All data collected from the survey is confidential and secure.

For facility managers, it’s important to figure out a way to adapt the data to meet individual needs, Bates said. “Create your own dashboard, with your own set of metrics,” he said. “Whether it’s to reduce costs, improve productivity, etc., your company’s needs may be vastly different from others in the industry. Once you’ve identified the metrics you wish to use, then you can properly form strategies based on comparisons to other companies.”

Suppliers have seen the benefits of benchmarking as well. “PRSM’s Benchmarking Report is a must-have for all PRSM supplier members. The data contained in the report has positively impacted our strategic planning efforts. We look forward to leveraging the historical benchmarking data as a long-term resource as we continue to enhance the services we provide to our retail partners,” says George Theofilos, Vice President of National Accounts, Powerhouse Retail Services .

Xavier went a bit deeper into specific trends an FM may wish to identify and compare. “One of the most important direct benefits of this research is access to Key Performance Indicators (KPIs),” Xavier said. KPIs are measurable values that demonstrate how effectively key business objectives are being achieved. These include ways to identify performance gaps, future trends, best practices and qualities of top-performing organizations, along with ways to improve processes and methodologies. “PRSM’s Benchmarking Tool provides KPIs in the ‘Results Summary’ sections. These KPIs are automatically calculated as users enter data. Not only can users immediately see these calculations, they can also compare their KPIs to peers,” Xavier explained. 

As benchmarking continues to move forward in the retail management field, PRSM is dedicated to ensuring FMs have the tools necessary to improve performance. The 2019 PRSM Benchmarking survey is vital to this mission.  

To access the PRSM Benchmarking Tool, visit www.prsm.com/Education-Resources/BenchmarkingReports. 

Benefits of Participating

Participating in the PRSM Benchmarking Survey provides many benefits, including:

  • Compare to Peers and Personalized Results reports, which are downloadable and accessible any time through the PRSM Benchmarking Tool.
  • Aggregate information for retailer and supplier surveys after data collection closes.
  • A complimentary copy of the 2019 Retail Facilities Maintenance Industry Overview, which would cost $750 as a PRSM member or $1,500 for a non-member.

Remember, respondents must answer all required questions to be recognized as a participant.

Report Card

Retailers have found great success participating in and using the PRSM Benchmarking Report. “The benchmarking report has become a valuable tool in highlighting the nuances of our specific retail business and in developing a story to share with staff and executives. Further, with the ability to create reports that benchmark our specific data against the industry it has become a reference to check and balance our short- and long-term planning. We look forward to participating in the next report and having access to robust information and also the ability to use the tools to internally benchmark our historic data,” said Michael Bowman, Director, Facilities, Environmental and Safety, LCBO. 

Golden Rule

By Sheryl S. Jackson 

There is no such thing as a crystal ball that can prepare retail facilities managers for the future, but FMs can look to California for a preview of what might happen in building energy efficiency requirements. 

The state’s Title 24 energy standards were enacted in 1978 and are updated every three years to reflect new energy efficient technologies and construction methods. All new construction of, and additions and alterations to, residential and nonresidential buildings are covered except hospitals, nursing homes, correctional centers, jails and prisons. 

“There are three areas of the Title 24 standards that affect retail facility managers most — HVAC, indoor air quality and lighting,” said CP Pitones, Senior Account Executive at Yardi Energy. “These are critical areas for retailers because all affect the overall customer experience.”

“There is a high, stringent standard set for HVAC systems with rooftop units, such as those used for many big box and retail stores,” said Yiming Peng, P.E., Energy Engineer at Yardi. The 2016 standards require an integrated energy efficiency ratio of 12.9 for a typical retail rooftop unit between 5 and 10 tons, which is a 13 percent increase from the 2013 standards. To ensure compliance with the standards, Title 24 also includes extensive acceptance testing procedures for HVAC equipment, he pointed out. 

Minimum standards 

In addition to setting efficiency expectations for HVAC systems, lighting systems also have minimum standards that must be met in Title 24 regulations, Peng explained. “There is a light power allowance for retail spaces — a maximum of 1.2 watts per square foot,” he said. Use of energy efficient lighting, such as LED systems; daylight harvesting strategies, such as skylights and daylighting control; and occupancy-related, automatic dimming controls to lower light levels when the building or parts of the building are not occupied are innovative approaches that lower the power use of lighting systems, he added.

Because compliance with indoor air quality standards relies on a ventilation system that brings outdoor air into the building, it is critical FMs develop a robust preventive maintenance program that includes regular filter changes to optimize the system’s effectiveness and energy efficiency, Pitones said. “The use of a demand control ventilation system that automatically adjusts operation based on occupancy levels also improves energy efficiency,” he said. “The system is designed to adjust ventilation rates based on the carbon dioxide levels that vary with occupancy.”

Throughout the design and construction phases of new construction or renovation, code enforcement personnel inspect to determine and test for compliance with standards. “The penalty for noncompliance is straightforward — an occupancy certificate is not issued,” Pitones said. Financially, this not only means the retailer must continue construction to bring the building into compliance, but also results in lost revenue as the opening is delayed. 

One caution offered by Peng is for FMs who might want to change what appears to be a small component or portion of an HVAC, lighting or ventilation system. “There are complicated trigger points that determine whether a project must comply with Title 24,” he said. Although the regulations include a spreadsheet detailing the specific trigger points, determining if a project requires Title 24 compliance can be complicated. “Consulting with a professional engineer who is familiar with the standards and trigger points is recommended,” he added.

State by state 

Peng doesn’t anticipate other states will adopt or write their own standards based on California’s Title 24, but he also noted that California has influenced some of the standards changes adopted by ASHRAE [American Society of Heating, Refrigerating and Air-Conditioning Engineers]. Not only do ASHRAE standards for energy efficiency set the baseline for LEED and Energy Star certification, but they are also used nationally by most states. As ASHRAE incorporates California requirements, states that rely on the national standards will be adopting components of the California standards — something that is already happening, he said. “The most recent version of ASHRAE standards reflect California standards, including the mandatory use of variable speed drives for a wider selection of HVAC application, including fans, pumps and compressors.”

Building codes, environmental rules and ordinances are constantly evolving. As demonstrated by Title 24, there are many discrepancies between the codes in one state and those in a different state. There are even differences between cities within the same state. These varying factors illustrate the importance of the facility manager’s role, as he or she seeks to monitor and manage dozens of retail locations.

Under Water

PRSM spoke with Lou DiDomenico, Director of Program Management at Ferrandino & Son, Inc., and Master Plumber Joe Smedley, the company’s Senior Project Manager, Plumbing Division , to help explain some of the basics. Here are some tips on how to properly vet and choose a great commercial plumber.  

Check their website

As the search for a plumber begins, Smedley suggests eliminating any who do not have a website. “And while reviewing the website, do some investigative work,” he said. “Check to ensure the plumbers are properly licensed and insured. Look for pictures of their trucks or crews. Make sure they have referrals or testimonials. How long have they been in business? Has anyone you personally know used them in the past?”

Trust your instincts

Use your intuition when you evaluate whether a company is telling the truth or misrepresenting themselves, said DiDomenico, who has worked in the plumbing, lighting and electrical trade businesses for more than 20 years. “Today, anyone can go to Home Depot and buy a drill and claim to be able to fix problems,” DiDomenico said. “It’s always important to research the company and check their credentials to ensure they’re up to date.” There are three accredited levels of plumbers, the lowest level being an ‘apprentice’; then ‘journeyman’; and finally, ‘master.’ Ask what level your potential plumber has attained, as that provides a definite gauge of his skill level and knowledge of the business.

Upon meeting, check their identity

When a plumbing company arrives at your store, check their appearance. “Do they have a uniform? Proper identification? The correct paperwork? You want to ensure they are who they say they are,” DiDomenico explained.  

Confirm they can handle any and all problems

Ask questions about the problem and potential solutions they propose. “Don’t be afraid to ask the plumber to explain every step and detail involved in completing the repair,” Smedley said. “It’s always best to challenge the plumber to explain everything they will be doing. It’s a good way to ensure he knows his stuff.”  

DiDomenico also stressed that a plumbing company should be prepared to address a wide-variety of situations. “Sometimes plumbers will tell you they don’t have the part, or they’ll come back in a few days,” he said. “You don’t want to hire someone who isn’t fully prepared to resolve your issues in a timely manner. Ask if they have the necessary materials to make the repair, and if they do not, ask if they’re affiliated with local companies who can provide the tool or part quickly.”

Make sure they are tech savvy

Technology is also becoming more prevalent in the plumbing industry, and technical capabilities are something you should expect in the plumber you hire. For example, a tech-savvy plumber can insert a small camera into a pipe to quickly and accurately assess what problems might be occurring, which usually saves valuable time and money. “Especially for larger retailers, make sure the plumbing company selected has high-tech equipment, or at least has access to it,” DiDomenico said. “Technology can also assist with accurately recording work hours, or time on the job, to ensure the retailer is paying a fair price for the service.”

AFTER THE FIX

If you did your homework before you hired a plumber, hopefully you can rest easy that your plumbing problems are resolved. 

“That’s why you researched and reviewed plumbers before you hired one,” Smedley explained. “Obviously you will know if a plumber has fixed a leak — that’s pretty straight forward. However, for some in-depth work, it’s more difficult to measure success. Properly vetting a plumbing business will usually provide improved results for your store.”

Knowledge Is Power

By Matt Alderton

Retailers collectively spend more than $21 billion per year on energy — over $3 billion of which could be saved with energy-efficiency measures, according to the Retail Industry Leaders Association.

Such measures can be especially impactful in multi-use retail, said Tom Kay, Vice President of Sales and Marketing at Entouch, a provider of turnkey energy management solutions for multi-unit enterprises. Adding a restaurant, for example, means adding refrigeration, ovens and fryers, all of which consume a lot of energy. Likewise for espresso machines in cafés, medical imaging equipment in health care clinics and ATMs in banking centers.

Because of their additional energy requirements, retailers incorporating nontraditional venues into traditional stores should expect bloated energy bills. That is, unless retail facility managers follow Kay’s advice for shrinking the energy footprint of new multi-use spaces:

Establish a baseline.

Because you can’t manage what you don’t measure, first you must determine how much energy your facility uses, and at what cost.

“Often, a facility manager is given authority over energy, but they have no visibility into energy spent,” Kay explained. He recommends obtaining regular energy statements from accounting to establish a baseline against which you can track progress.

There are numerous energy metrics worth monitoring. One of the most fruitful is kilowatt-hour per square foot (KWH/Ft2), calculated by dividing total energy use by the square footage of your facility. The lower the number, the lower the total energy cost. Retailers’ target should be less than 16 KWH/Ft2, according to information from Entouch.

Plan ahead.

It’s not enough to study energy statements. Facility managers must also study equipment, some of which may be new to them in the case of multi-use retail.

“If my leadership team made the decision to change the format of my store from Building Type A to Building Type B — and Building Type B had a restaurant or café in it, I, as a facility manager, would have to really up my game in terms of understanding the equipment that’s being brought into my store,” Kay said. He recommends taking inventory of new equipment and researching its expected performance. Doing so might reveal opportunities for optimization. Kitchen equipment, for example, doesn’t just consume electricity; it also generates heat. Facility managers who know that can plan ahead with HVAC upgrades or behavioral modifications that reduce cooling loads.

In the same spirit, facility managers who will work in new multi-use stores must seek a seat at the planning table to ensure they’re energy-optimized.

“The facility manager today may not have visibility into what’s planned for tomorrow, so I would encourage them to partner with their counterparts in the new construction, real estate and design departments, to clearly understand where the company, as a whole, is going,” Kay explained. He said stores perform best when they’re designed with long-term maintenance in mind.

Explore the cutting edge.

Energy management is evolving rapidly. Two innovation centers that are particularly promising for multi-use retail are energy storage and the Internet of Things (IoT).

In energy storage, suppliers are rapidly maturing new chemical and thermal batteries that can capture and store cheap electricity to apply toward energy-intensive tasks like refrigeration; retailers can acquire energy from the electrical grid during off-peak hours, when costs are low, and store it in batteries that discharge it during on-peak hours, when costs are high.

“If you’re smart, you will minimize the use of peak energy,” Kay said. Retailers can also reduce peak energy consumption with “staging” — powering on rooftop HVAC units or other equipment incrementally — instead of all at once — to reduce energy loads.

Then, there’s the IoT, at the heart of which are internet-connected sensors that enable real-time energy monitoring and reporting. When they use an IoT-enabled energy management solution, facility managers receive early notice when equipment is underperforming, which helps them perform preventative maintenance that optimizes energy consumption and extends the life of equipment. They can also adjust operations on the fly in response to energy fluctuations and — especially helpful in multi-use retail — divide stores into “zones” that can be dynamically managed based on their unique energy profiles. For example, if a store needs extra cooling in its restaurant because of kitchen heat, the facility manager can keep energy costs in check by lowering the temperature there and maintaining it elsewhere.

Pick low-hanging fruit.

Although multi-use retail is complex, energy management doesn’t have to be. In fact, some of the most effective energy measures are also the simplest.

Start with the thermostat, for example. “If your thermostat is located on the store floor, or even in the manager’s office, employees are going to play with it unless you establish some level of control,” Kay explained. You can physically restrict access to the thermostat or digitally program it to stay within a chosen range. Either way, a stable temperature translates into stable energy bills.

Another simple strategy is lighting. “If you have not converted to LED lighting, do it now because there’s a large amount of energy being [wasted] by old lighting equipment,” Kay said.

Kay concluded, “The retail facility manager is often seen as a cost center. But when they have actionable data about their assets and energy spend, retail facility managers become a cost-avoidance center, instead. And potentially even a profit center.” 

Mixed Blessings

Challenges

Parking Concerns

Traffic is always a concern with high-density retail areas. With mixed-use spaces, however, you also need to take into account residential vs. retail parking availability to create a balance between visitor and dwelling parking spots.

Noise and Sound Issues

You must take into account how close businesses are to residential areas. Noise pollution at inopportune times of the day can be problematic to residents.

Security

Access to certain areas within a building can be tricky. Specific users need to be allowed in some areas, while others must be prohibited. Finding a way to separate functions and access must be decided early in the planning process.

Benefits

Improved Walkability

There has been a shift toward a desire to live within walking distance to restaurants, retail and workspaces in recent years. Mixed-use facilities are able to offer this walkability by combining these spaces into one.

Lower Infrastructure Costs

By having businesses closer together, municipalities often are able to save money on roads, sewers and essential personnel like police and fire departments.

More Vibrant Communities

Mixed-use facilities offer amenities that foster community interaction. Plazas and parks, along with numerous shopping and dining options, can attract more buyers.

Pop Goes the Shop

By Mary Lou Jay 

Pop-up shops provide retailers with opportunities to boost brand awareness, engage current and new customers and promote selected merchandise. But pop-ups present several challenges for facility managers, whether the unused space that they’re converting into a temporary store is in a mall, a strip shopping center or freestanding. 

“Pop-ups are one of the fastest turnaround projects FMs are given, and, for many of them, these are first-time projects,” said Alexandra Sanchez, Sales Manager for Branded Group, a facilities maintenance company. FMs often don’t know what to expect in preparing, maintaining and closing out the space.

Problems can begin with the acquisition of the space. Sanchez said that in most companies, the real estate department doesn’t consult the FM before signing the lease. As a result, FMs may have to resolve — on a schedule that can be as short as two weeks — plumbing, electrical or HVAC issues. “These pop-ups are something retailers want to have done as fast as possible and as cost-effective as possible,” Sanchez added.

But pop-ups can’t reflect that cheap and fast approach; they have to be a finished, inviting space that’s consistent with the brand, according to Kate Turner, Facilities Manager at beauty retailer Glossier. The company’s most recent pop-up, in an old, converted fire station in Chicago’s North Loop, was open from mid-August through October 2018.

Turner worked with an architect and a general contractor to ensure any changes made to this space complied with the city’s codes. She hired a millworker and worked with the construction and creative teams to ensure fixtures didn’t require long lead times or extensive custom work. Since Glossier expected heavy store traffic, Turner scheduled a painting crew three times a week to repaint all the surfaces being touched.

“We are an Instagram and social media-heavy brand. People who come to our stores are coming for the experience; they take photos and enjoy the environment. So, it is important that all of the i’s are dotted and the t’s crossed,” Turner explained.

Getting a cleaning crew proved to be one of the most difficult tasks. Vendors usually want a long-term relationship, and that’s not going to happen with a store open for a limited time. That makes it more difficult to negotiate favorable terms. “Cleaning is often a line item people think they can pinch, but it’s actually one that needs to be given more wiggle room with a pop-up,” Turner said. 

Once the Chicago pop-up closed, Turner’s team cleared out and cleaned the space. After removing all the product, they took inventory and stored the equipment and materials that will be used for future pop-up locations and disposed of the rest. 

Management Tips

In 2017, Branded Group worked on fewer than 40 pop-ups for its clients, but in 2018 they were involved in more than 100 of the short-term shops.

“The number of pop-ups has been dramatically increasing each year, and we don’t expect them to go away any time soon,” Sanchez said. “We’ve had to create a pop-up-dedicated team to manage the volume.” They’ve also developed a checklist to help FMs determine what needs to be done and who will do it. 

Sanchez and Turner offer these recommendations for managing pop-up facilities:

  • If possible, be included in the pop-up site selection process. Facilities management input can help reduce problems and improve maintenance outcomes.  
  • Once the site has been selected, ask for detailed information about the condition of the space and what it should look like. Share this with vendors as soon as possible.
  • Decide early in the process who will do what. Will your department contract with various vendors for making repairs, painting, janitorial services, etc.? Or will you work with a firm that provides these services?
  • Get bids from multiple vendors to determine a realistic project budget. Don’t expect definitive prices until you can provide details about the space. 
  • Develop a good relationship with the owner or manager of the space. Understand their requirements before you begin executing your plans or bringing people in. For example, do janitorial staff and service workers have to be approved or cleared before they can come to the property to perform their work?
  • Hire a cleaning vendor as soon as possible to allow time to identify a good, dependable crew for your pop-up shop. Don’t expect bargain prices for a short-term job.
  • Look ahead to close-out. Who will be in charge of emptying the space? Are fixtures going to another store, going into storage or will they need to be disposed of?

While it can be challenging to transform an unused space into an attractive pop-up shop, facility managers are key in ensuring this short-term store successfully fulfills its mission.