Corporate Responsibility 2015 Annual Report

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Letter from our Executive Chairman I am proud to write this letter for Col-

ings to help us track our energy, wa-

tenants all benefit from ESG initia-

ony Capital’s first annual Corporate

ter, emission, and waste reduction

tives. Tenants benefit from lower

Responsibility Report. Although the

targets on an ongoing basis.

operating costs while building own-

information contained in this report may be new to the public eye, Corporate Responsibility and Environmental, Social, and Governance (ESG) principles have long been a part of how we do business. Building long-term financial value, efficiently managing resources, in-

vesting responsibly, leading transparently, and creating a positive impact in our industry and our communities continue to be the goals guiding our decision-making everyday. 2015 was a big year for our Corporate Responsibility efforts. We developed new goals and performance targets as well as 14 new policies that are being implemented. To date, we have registered and benchmarked over 250 office and industrial buildings in our portfolio under the EPA ENERGY STAR® program and plan to benchmark all eligible build-

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Looking toward the future, we have set many ambitious goals for Colony Capital. Some of these include reducing our energy and carbon emissions use by 20% across the portfolio, reducing our water use by 30%, increasing our waste diversion rate to 75% and adopting green cleaning practices across 100% of the portfolio by 2026. We also plan to pursue ENERGY STAR labels for all eligible office assets and complete energy audits for assets that have an average Energy Star score below 75. The built environment plays a significant role in water, waste, and transportation use. As awareness of the environmental impact of real estate continues to grow, our tenants and investors are demanding sustainable real estate. Investors, lenders, building owners, asset managers, and

CO LO N Y C A PI TA L C O RP O R A TE RE SP O N SI B I L I TY 20 1 5

ers/managers see increases in rent, building values, occupancy, and retention. Meanwhile, by implementing a more robust ESG due diligence process as part of our lending strategy we can lessen our risk with reduced default rates and improve our ROI. As the industry

evolves, the demand for efficient buildings is steadily growing. With financial, environmental, and social incentives in place the built environment will continue to transform. Encouraged by our sustainability commitment and new reporting efforts, we are optimistic about Colony Capital’s future and contribution to

stakeholders through responsible investing principles that are complementary to our investment mandates and a more sustainable future.

ESG practices. We look forward to translating our industry leadership into exceptional ESG performance. We believe that this report demonstrates Colony’s commitment to building long-term value for our

Thomas J. Barrack, Jr. Executive Chairman

ENVIRONMENT Sustainable Operations Risk Management Sustainability Policies Environmental Management System LEED Certified Properties

Table of Contents GOVERNANCE Responsible Investment Sustainability Commitment Targets and Performance Goals

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Governance Structure Corporate Responsibility Timeline Case Study: Excelsior Crossings

ENERGY STAR Labeled Properties Performance Indicators

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Sustainability Initiatives Case Study: Dry Creek Corporate Center II & III

S O C I AL Tenant Engagement Social Responsibility Partnerships and Programs Education and Outreach Case Study: 5100 River Road

Reporting and Disclosure GRI Index

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C O M P AN Y O V E RV I E W

Company Overview Colony Capital, Inc. (NYSE: CLNY)

Our investment portfolio is primarily

is a leading global real estate and

composed of:

investment management firm headquartered in Los Angeles,



Real estate equity

California with more than 300



Real estate and real estate-

employees. As of December 31, 2015, we have $18.8 billion of assets and $9.3 billion of fee-earning

related debt



Investment management of

equity under management through

Company-sponsored private

our global investment management

equity funds and vehicles.

business, which has operated under

the Colony Capital brand for more than 25 years. We have relied on the experience

Our investments are diversified across a wide spectrum of commercial real estate property types,

and relationships cultivated over this

including but not limited to, office,

period to target attractive risk-

industrial, retail, hospitality, edu-

adjusted returns for our investors by

cation, single-family and multifamily

investing primarily in real estate and

residential assets. We operate glo-

real estate-related assets. We

bally with the majority of our assets

manage capital on behalf of both

in North America and Europe.

company shareholders and limited

300+ Employees

14 Offices

10 Countries

$19 Billion Assets Under Management

$64 Billion

partners in private investment funds.

Gross Assets Invested Since Inception

Colony Capital Headquarters Los Angeles, CA 4

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$25 Billion Invested Equity Since Inception

C O M P AN Y O V E RV I E W

Global Real Estate and Investment Management Combining the best qualities of REITs and Investment Managers, Colony Capital is a uniquely positioned, fully aligned global real estate and investment management company.

Diversified and Public REIT

Real Estate Investment Manager



NYSE-listed REIT





Scalable global portfolio of real estate platforms and assets



Investments in both equity and debt

across all property types



A balanced combination of both foundational current yield and capital

Successful history investing across all real estate asset classes and around the globe



Seasoned management team with access to proprietary deal sourcing



Global infrastructure and relationships



25 years of institutional “best practices”

appreciation

and risk management combined with an entrepreneurial culture Astral Towers, Gatwick, United Kingdom; CLNY and CDCF III Investment

Internally managed

Foundational earnings

publicly traded REIT with significant insider

and dividends generated by diversified real

ownership that targets attractive total returns

estate equity and debt investment portfolio

on a risk-adjusted basis

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Global real estate investment management platform with a long term orientation and stable balance sheet

C O M P AN Y O V E RV I E W

Colony Capital is a global real estate and investment management company with over 300 employees across 14 offices in 10 countries making it one of the largest real estate private equity platforms.

Luxembourg Boston New York City

Los Angeles

London

Berlin

Paris

Madrid

Headquarters

Seoul

Beirut

Rome

Hong Kong

Dallas Atlanta

AUM by Investment Type

AUM by Geography

50% 34% 16% RE Equity

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RE Debt

RE OpCo / Other

68% 29% U.S.

European

3% Other

$19 Billion

$64 Billion

$25 Billion

Assets Under Management

Gross Assets Invested Since Inception

Invested Equity Since Inception

Governance In the management and operation of our business, we take our stakeholder needs and values into consideration for longterm growth and sustainability.

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G O V E R N AN C E

Responsible Investment Colony Capital incorporates its sustainability objectives into its overall business strategy through a range of policies and procedures that address climate, energy, water, waste, and occupant well-being. Colony Capital is committed to creating long-term value for our stakeholders by building a resilient portfolio that reduces risk and preserves resources.

4350 International Parkway, Atlanta, GA; CLNY and CLIP Investment

Our investments are diversified

rowers, or other geopolitical issues.

We have also set measurable

We track changes in occupancy

across a wide spectrum of

If we determine that a proposed

targets for greening our existing

rates, operating expenses, and

commercial real estate property

investment presents excessive risk,

investments, including:

overall values of ENERGY STAR

types, including office, industrial,

we may decide not to pursue an

labeled and LEED certified buildings

retail, hospitality, education, single-

otherwise attractive investment.



family, and multifamily residential assets, all located primarily within North America and Europe.

eligible office properties by 2020, based on square footage

With the implementation of a formal Corporate Responsibility program, we have deepened our risk analysis

Achieving LEED certification for



Benchmarking and automating our utility data tracking for all

In addition to evaluating the merits

by addressing specific ESG related

of any proposed investment, we

risks. Our policies cover a wide

evaluate the diversification of our

range of risks from climate change

portfolio of assets. Prior to making a

and resiliency to region specific

for all eligible office assets and

final investment decision, we deter-

risks. As of 2015, most new invest-

achieving an average score of 75

mine whether a target asset will

ments are required to complete an

by 2026

cause our portfolio to be too heavily

ESG assessment survey and are

concentrated in, or cause too much

evaluated using Colony's

risk exposure to, any one real estate

sustainability criteria.

sector, geographic region, source of cash flow such as tenants or bor8

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eligible assets by 2017





Pursuing ENERGY STAR labels

Completing energy audits for inefficient assets for 60% of the portfolio by 2020

against comparable non-green buildings to better understand the long-term impact of these investments on our portfolio.

G O V E R N AN C E

Sustainability Commitment Colony’s approach to sustainability is defined by adherence to ESG principles which we strive to integrate into all aspects of our business.

PRINCIPLES —

At Colony, we understand the importance of working with our stakeholders and partners to advance a more resilient and sustainable portfolio. We believe that many properties

Environmental Preservation

are enhanced by integrating sustainable design strategies. Physical improvements that

We strive for the efficient use of natural resources by

reduce energy costs and extend the life of equipment can contribute directly to bottom-

continuously improving our operational performance and

line savings (and therefore asset values). In addition, assets that incorporate these

reducing our energy, water use, waste, and carbon

features may also see benefits in terms of attractiveness to tenants, retention of tenants,

emissions.

and achievable rents.

Effective Governance

Our newly defined commitments and goals will guide the company's policies and opera-

We are committed to alignment of interests and transparent

tions in a direction that benefits our people, our shareholders, and our environment:

leadership by tracking, measuring, and sharing portfolio-wide performance goals and metrics that drive collaboration toward ongoing improvements.

VISION — Our vision is to build a sustainable future by

People-Focused

creating economic value, preserving resources, and

We value the needs of the communities in which we operate

improving the communities in which we operate.

and hold all of our stakeholder relationships, from our employees and investors to suppliers and tenants, in high regard.

MISSION — Our mission is to responsibly manage our

Sustainable Investments

investment activity with a strong commitment to

that generate sustainable value and reduce risks for

Environmental, Social, and Governance principles.

investors, tenants, and communities.

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We strive to invest in and manage high performing assets

G O V E R N AN C E

Sustainability Commitment GOALS — Build Long-Term Financial Value Create long-term value for our stakeholders through responsible investing complementary to our investment mandates. Efficiently Manage Resources Integrate leading ESG practices throughout our operations while collaborating with service providers, tenants, and communities. Invest Responsibly Build a resilient portfolio that reduces risks and preserves resources while enhancing economic value. Lead Transparently Measure and manage our business operations to improve environmental and financial performance and openly communicate progress with our stakeholders. Create a Positive Impact Make a positive, lasting impact in our communities by working to improve the health and well-being of our employees and supporting charitable activities. Fairmont Austin (opening 2017),Texas; CLNY & CDCF III Investment

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G O V E R N AN C E

Targets and Performance Goals We can only improve what we can measure. We have made commitments to both short-term and long-term targets that support our corporate responsibility goals.

Building benchmarking through certifications and energy rating programs help set portfolio wide goals, track improvements and award properties making efforts to improve sustainability. Colony is

dedicated to benchmarking our properties' performance in order to track our achievements and identify

100%

100%

of properties implement green cleaning policy by 2026

of properties benchmarked in the EPA’s Portfolio Manager by 2026

areas of improvement. Ambitious reductions in energy, waste, and water as well as comprehensive data management define many of our sustainability goals for upcoming years. We look forward to

pursuing these measurable targets from a 2016 baseline year.

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30% reduction in water usage by 2026

20% reduction in greenhouse gas and carbon emissions by 2026

75% waste diversion rate by 2026

75 Average ENERGY STAR score by 2026

G O V E R N AN C E

Targets and Performance Goals LEED Certifications

Colony Capital will pursue LEED certification for assets deemed eligible and feasible. LEED will be used as a tool to implement sustainability strategies at the property level. Our current goal is to prioritize larger office buildings with high ENERGY STAR scores that are located in urban locations as candidates for certification. EPA Portfolio Manager Colony Capital plans to benchmark all eligible assets in the EPA’s Portfolio Manager energy and water tracking tool by 2017. By 2026 we hope to attain a portfolio wide average ENERGY STAR score of 75 for all eligible assets. Additionally, we plan to pursue ENERGY STAR labels for all eligible assets (Score ≥ 75). Colony intends to use the ENERGY STAR score to prioritize buildings for LEED certification and retrofits. For example, buildings with a score of 75 or lower would be recommended to have an Energy Audit.

Ritz Carlton, Kapalua, Hawaii; CLNY and CDCF III Investment

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G O V E R N AN C E

Governance Structure Colony Capital is committed to providing long-term value for our communities and stakeholders by embracing ESG factors as an integral part of our sustainability program.

CLNY Board of Directors

In 2015, Colony Capital formed an official Corporate Responsibility Committee with the task of developing and implementing Colony's corporate responsibility strategy and programs. This committee is assisted by internal teams in

Thomas J. Barrack, Jr. Executive Chairman

Richard B. Saltzman CEO and President

acquisitions and asset management as well as third-party property managers and vendors. The committee reports to the Board of Directors on the Corporate Responsibility Committee

company's corporate responsibility initiatives and progress towards key goals.

Colony Capital has engaged Verdani Partners to support and manage our Corporate Responsibility programs as a full-time, in-house resource. Our inhouse Corporate Responsibility Team reports to the Sustainability Director

Verdani Partners Sustainability Consultant

on a bi-weekly basis. The core Corporate Responsibility Team includes Ryan McManus as Director of Sustainability, Daniele Horton as Sustainability Advisor, Shubha Mohunta as Sustainability Manager, and Mei Tsuruta as Energy Engineer. The Corporate Responsibility Committee receives the highlights of our sustainability initiatives on a quarterly basis.

Colony Acquisitions

Colony Asset Management

The Corporate Responsibility Team also participates on calls with property management teams on an as needed basis. The team is responsible for keeping the company informed on sustainability initiatives via our internal Sustainability Intranet Site, newsletters, and email communications.

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Third-Party Vendors

Platforms

G O V E R N AN C E

Timeline Launched Colony Corporate Responsibility (CR) Program and formed CR Team

Conducted an internal Visioning Survey

NOV 2015

Developed portfolio schema to track asset level data and sustainability attributes

Developed Sustainability Strategy (Mission, Vision, Goals & Targets)

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Adopted 14 Corporate ESG Policies and Procedures

Employee Survey

DEC

Benchmarked over 250 buildings on ENERGY STAR

Launched CR internal SharePoint site

Developed Colony Capital’s EMS Program (ISO 14001)

Developed Green Lease Language

Developed Stakeholder Engagement Program

Developed Social Program

JAN 2016

Ongoing ENERGY STAR account reconciliation

FEB

Ongoing data collection and ENERGY STAR benchmarking

Developed CR branding materials (logo, banner, cover, etc.)

CO LO N Y C A PI TA L C O RP O R A TE RE SP O N SI B I L I TY 20 1 5

Responded to ESG Compliance Investor Survey

Documented sustainability case studies

MAR

Developed loan strategy and sent survey to borrowers

Sent Memo to raise awareness for Earth Day

APR

Launched Green Office Guide Conducted RFP for utility automation and reporting vendor selection

Responded to Colony’s first CDP Application

GRESB annual survey to property managers

Sent Memo for Bike to Work Week

MAY

Responded to the first annual GRESB Survey

Released first Newsletter announcing the CR Program

JUN

Prepared first annual Corporate Responsibility Annual Report

Launched Corporate Responsibility section of Colony’s website

LEED Green Associate and Sustainability Training

Begin Identifying high ROI sustainability projects for inclusion in 2017 business plan

JUL

Published first Corporate Responsibility Annual Report and Press Release

C AS E S T U D Y

Excelsior Crossings Hopkins, MN CLNY Investment

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LEED for NC Gold

C AS E S T U D Y

Excelsior Crossings Hopkins, MN LEED for New Construction Gold

Excelsior Crossings includes two Class A, seven-story office buildings, located in Hopkins, Minnesota totaling 501,603 square feet. The properties were built in 2008

and 2009 and are located in the center of both the I-494 and I-394 Corridors featuring convenient access to the Southwest Corridor light rail line. A central courtyard with a pond feature and outdoor dining areas with walking paths connects to the Hennepin County bike and walking path system.

Building Highlights Built with sustainable construction practices, the buildings have been awarded LEED Gold certification. Sustainability Features



Extra high-efficiency mechanical and electrical systems



Natural day lighting on all floors with automated and daylight lighting controls



Chemical free water treatment systems



Low flow plumbing fixtures



Reflective roofing systems



Efficient irrigation systems and green housekeeping



Achieved LEED for NC Gold in 2008

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Environment We seek to improve operating performance, resulting in reductions in energy and water use, waste and carbon emissions, and lower operating costs.

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E N V I RO NM E N T

Sustainable Operations By collaborating with service providers, tenants, and communities, we are enabling our day-to-day operations to be more efficient, more resilient, and less costly.

In 2015, Colony Capital established the groundwork for a more comprehensive and measurable corporate responsibility program. This included establishing a robust data collection and management system that helps monitor performance and identify areas for improvement. To do this, we aim to benchmark 100% of properties in the EPA's ENERGY STAR Portfolio Manager by 2026. The ENERGY STAR

program allows us to track our properties' water and energy consumption, GHG emissions, and assess year-over-year performance. We are also engaged in the USGBC’s LEED certification program for our properties. LEED-certified buildings are industry leaders in resource efficiency, water conservation and energy savings. To date, over 1.5 million square feet of space in eight buildings have been LEED-certified. We are continually evaluating our overall operations in coordination

with our value chain to determine when and where ESG initiatives can be implemented or enhanced. When cost-effective, Colony is committed to making the necessary investments to green our portfolio and streamline operations.

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100% by 2026 Properties benchmarked on ENERGY STAR Portfolio Manager

E N V I RO NM E N T

Risk Management Colony Capital operates and manages its business by taking into account stakeholder needs and values to promote long-term growth. Risk management is a central

with each property, we plan to be

appropriately evaluate potential

simultaneously improve the

aspect of Colony’s Corporate

prepared to manage such changes.

capital investments. This will improve

efficiency of the buildings. This in

performance and competitiveness,

turn reduces operating costs and

create value, and to minimize risks.

increases the financial stability and

Responsibility program. It involves managing risk of operational disruptions like resource scarcity, climate change impact, and community risks. Today, investors and tenants are increasingly prioritizing energy and water efficiency, climate change resilience

Additionally, Colony Capital evaluates sustainability characteristics as part of our due diligence

Colony Capital aims to reduce its

procedures for new acquisitions and

GHG emissions by 20% across the

investments. The intent is to better

portfolio by year 2026 with the

understand the environmental

intention to minimize our

performance of assets and to

environmental impact and

preparedness, and workplace health safety and productivity. In addition, regulators are progressively mandating greater transparency from the real estate sector. To address these drivers, we have

developed and are implementing a Climate Change and Building Resilience policy which aims to assess and mitigate climate related risks associated with hurricanes, fires, floods and other extreme weather conditions on a regional basis. Based on the risks associated

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competiveness of our assets.

Odessa, Aurora, CO; CLNY and CLIP Investment

E N V I RO NM E N T

Sustainability Policies Colony Capital incorporates sustainability objectives into its overall business strategy through a range of policies and procedures that address climate, energy, water, waste, occupant well-being

Corporate Policies

and productivity. This is done through Colony’s acquisitions, tenant improvements, capital



Building Resilience and Climate Change Policy

budgeting, operations and reporting processes.



Health and Wellbeing Guide

Colony Capital has adopted policies that offer guidelines and best practices for operating and



Stakeholder Engagement Policy

maintaining more efficient buildings. We regularly update these policies and provide implementation



Sustainable Due Diligence for New Acquisitions

direction to our staff, tenants, and service providers.

Property Level Policies

Centre at Purchase, NY; CLNY and CDCF IV Investment (Loan)

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

Energy Policy



Water Efficiency Policy



Waste Management Policy



Smoking Policy



Green Office Guide



Green Cleaning Policy



Indoor Air Quality Management Policy



Tenant Improvement Guide



Sustainable Purchasing Policy



Refrigerant Management Policy

E N V I RO NM E N T

Environmental Management System Colony Capital’s Corporate Responsibility Program is supported by a centralized Environmental Management System (EMS) platform that allows us to strategically plan, optimize, communicate, and manage all key components of the program.

To ensure that our EMS is on par with industry standards, it is aligned with ISO 14001 and follows the following structure: 1. Plan: Establishes the scope of the organization’s environmental policy, objectives and areas of impact including relationships with key stakeholders. 2. Do: To ensure the implementation and maintenance of the

action plan, Colony has adopted 14 policies and a comprehensive communications and tenant engagement program to build relationships with key stakeholders including employees, tenants

Sustainability Policies

Mission and Vision

Communications Targets and Goals Strategic Plan

Green Building Certifications

PLAN

DO

ACT

CHECK

and the communities in which we operate. 3. Check: Colony monitors and tracks key metrics through ENERGY STAR Portfolio Manager to ensure alignment with the goals and targets established. 4. Act: Our stakeholder engagement program allows Colony

Capital to seek feedback on our methods and performance. Stakeholders can provide feedback through surveys, newsletters, email, and other forms of communication. We believe that the Sustainability Program is most successful when our employees, tenants, vendors, and investors are engaged and sharing resources and knowledge with the company and each other.

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Benchmarking

Stakeholder Engagement

Partnership

Data Management Reporting

E N V I RO NM E N T

LEED Certified Properties Green building certifications and designations such as the U.S. EPA's ENERGY STAR and the U.S. Green Building Council’s LEED are important markers of sustainable real estate. The following Colony properties have earned various green building certifications that strengthen our overall portfolio.

Property

Gross Sq. Ft.

LEED Certification Level

Dry Creek Corporate Center II & III

185,957

Silver

10700-10800 East Geddes Avenue Englewood, CO

155 Pfingsten Road

119,265

Silver

155 Pfingsten Road, Deerfield, IL

161 The Meadows

138,913

Certified

3190 Fairview Park

232,290

Silver

3190 Fairview Park Drive, Falls Church, VA

492 Old Connecticut Path

171,874

Certified

492 Old Connecticut Path, Framingham, MA

5100 River Road

140,730

Silver

5100 River Road, Schiller Park, IL

Corporate Lakes III

124,327

Gold

2200 Cabot Dr., Lisle, IL

Excelsior Crossings

501,603

Gold

9380 Excelsior Blvd. Hopkins, MN

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Location

161 Worcester Rd, Framingham, MA

G O V E R N AN C E

Top ENERGY STAR Benchmarked Properties Colony Capital is moving towards bench-

Property

Type

Location

STAR Portfolio Manager® tool in order to

383 Inverness

Office

Englewood, CO

establish a utility baseline, measure, man-

385 Inverness

Office

Englewood, CO

Fair Oaks Commerce Center

Office

Fairfax, VA

492 Old Connecticut Path

Office

Framingham, MA

and better data quality among Colony’s

Dry Creek Corporate Center II

Office

Englewood, CO

Colony Realty Partners (CRP) portfolio.

5100 River Road

Office

Schiller Park, IL

Dry Creek Corporate Center III

Office

Englewood, CO

Tyson's International

Office

Vienna, VA

161 The Meadows

Office

Framingham, MA

Corporate Lakes Three

Office

Lisle, IL

3701 Pender Drive

Office

Fairfax, VA

Bridge Gate Plaza

Office

Diamond Bar, CA

155 Pfingsten Road

Office

Deerfield, IL

3190 Fairview Park

Office

Falls Church, VA

3405 Piedmont

Office

Atlanta, GA

Oakbrook Terrace Corporate Center III

Office

Oakbrook Terrace, IL

Lincoln Park I

Office

Herndon, VA

14040 Park Center Road

Office

Herndon, VA

Highland Atrium

Office

Downers Grove, IL

marking all assets in the EPA’s ENERGY

age and reduce energy and water consumption. This list represents our properties with the highest Energy Star Scores

100% 90%

5

80% 70%

14

60% 50% 40% 30%

20

20% 10% Score: ≥90 75-89 1-74

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E N V I RO NM E N T

Performance Indicators Colony Capital’s goal is to track energy, water, and greenhouse gas (GHG) emissions for the entire portfolio in order to identify efficiency opportunities and benchmark performance over time.

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Buildings with data

3,035,288

Square Footage

5,512,199

Kiloliters consumed

The data on this page represents the first phase of our portfolio wide utility data management program for the CRP fund series. The total CRP Portfolio includes 228 buildings and 23,077,467 square feet. The data coverage reported for Water and Energy consumption represents 13.2%

51,026

Megawatt hours consumed

of the total CRP square footage.

1,348,553

9 1,113,356 8 24

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Square footage of ENERGY STAR Labeled

Buildings ENERGY STAR Labeled

Square footage LEED Certified

Buildings LEED Certified

E N V I RO NM E N T

Sustainability Initiatives Sustainable Sites  Protect natural and agricultural areas

 Reduce automobile use

Energy Efficiency  Reduce energy usage and

Water Efficiency  Monitor and reduce potable

carbon emissions

 Encourage usage of clean

water usage

 Encourage usage of water efficient

energy

 Restore and revitalize

flush and flow fixtures

Materials and Resources  Reduce waste and toxins in landfills and increase recycling

Indoor Air Quality  Improve indoor air quality and mitigate contaminants

 Enforce no-smoking

 Reduce Mercury pollution We plan to use green cleaning

 Practice water smart landscaping Colony Capital has adopted an

Colony Capital has created a

products to improve the quality of

Energy Policy with a goal to

Colony Capital has adopted a water

robust waste management

indoor air at all Colony Capital

We are continually

benchmark and track our energy

efficiency policy to reduce potable

policy to reduce the amount of

properties.

working to minimize the

consumption on ENERGY STAR

water usage goals. Colony

waste and toxins hauled to and

environmental impact of

Portfolio Manager, improve

encourages the usage of water

disposed of in landfills or

our business and protect

energy efficiency, reduce

efficient flush and flow fixtures at all

incineration facilities. We plan

local natural resources.

operating expenses, optimize

properties. We will also work towards

to conduct at least one e-

capital investments, reduce

increasing native and drought-

cycling event at most office and

environmental impacts, reduce

resistant vegetation 30% by 2026.

residential assets annually.

conserve natural resources.

Case Studies: Dry Creek Corporate

This policy encompasses

Case Studies: Black’s Ridge

features including a cooling tower

Property updated their T12

water management leak detection

lighting to energy efficient T8

system, drip irrigation system, drought

fixtures. Lennar Corporate Center

tolerant landscaping and metering of

derived 10%-15% savings in

sub-systems. Fair Oaks Commerce

electricity usage per year by

Center installed a program to reuse

performing upgrades in the BAS,

storm water and grey water for non-

lighting upgrades, roof reflective

potable applications.

local ecosystems

With many of our properties located in urban areas, occupants have alternate commuting options. Case Study: Mulch Project: In November 2015, Colony employees volunteered to transform 64,000 sq. ft. of Redwood Business Park’s lawn into drought-friendly mulch.

greenhouse gas emissions, and

coating and insulation.

Center II & III installed water efficiency

We have implemented a policy which will require a periodic examination of HVAC systems, building exterior and indoor spaces. We plan to perform Indoor Air Quality Assessment at most of our

ongoing consumables, durable goods and materials used during facility alterations including the recycling of mercury containing lamps.

office buildings. Additionally, Colony has adopted a

no-smoking policy inside the building or within 25 feet of all points of entry. Case Study: Crown Ridge at Fair

Case Study: Lennar

Oaks performed a minimum

Corporate recycles all waste/

outside air assessment to ensure

trash and paper products

that the ventilation systems are

removed from the site.

optimized for better air quality and occupant wellbeing.

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C AS E S T U D Y

Dry Creek Corporate Center II & III Englewood, CO CRP II

LEED EB Gold

87 ENERGY STAR score

466,520 Gallons of water saved annually

100% Durable goods diversion

40,460

kWh

Energy Reduction annually

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C AS E S T U D Y

Dry Creek Corporate Center II & III Englewood, CO LEED for Existing Buildings Gold

Dry Creek Corporate Center I & II received the prestigious U.S. Green Building

Green Cleaning Program which resulted in achieving the maximum

Council’s LEED for Existing Buildings: Operations & Maintenance Gold

number of points for the cleaning assessment.

certification in 2010. The sustainability initiatives undertaken have resulted in a 40,460 kWh reduction annually and a reduction of 29 metric tons of CO2.



Achieving exemplary performance for purchasing 97% sustainable cleaning products. Sustainable purchases included Green Seal®-certified cleaning

This is equivalent to the total electricity usage of four homes for one year.

chemicals, as well as paper products with recycled content.

 Building Highlights

Purchasing 75% off-site renewable energy. The property has committed to purchasing Renewable Energy Certificates to cover 75% of the building’s energy consumption for two years.



Building II Class A, 93,601 sq. ft. 3-story office building



Building III Class A, 92,356 sq. ft., 3-story office building

ASHRAE Level II audit was performed at the building which identified ECMs



Achieved LEED Gold in 2010

All no- and low-cost upgrades were completed including the following:



87 ENERGY Star Performance Rating



Sustainability Features



Reducing conventional commuting trips by 28%. This reduction was









Replaced 25 watt lamps in Stairwells with 14 watt LEDs



Reduced the unoccupied heating set point from 65 to 55 degrees F

Using high grade air conditioning filters. MERV 13 filters are installed in



Reducing mercury content in lamps. Lincoln Property Company continued to implement its lamp purchasing plan which reduces the overall

trees and groundcover adds to the perviousness of the site thus reducing

mercury content of the building to less than 50 picograms per lumen-hour.



Achieving exemplary performance for diverting 100% of durable goods waste.

Reducing indoor plumbing water use by 33.5% compared to standard

During Earth week, the property team held a recycling event sponsored by

fixtures. Existing high-efficiency plumbing fixtures save an estimated

Goodwill Industries which generated 2,291 pounds of office electronic waste,

466,510 gallons annually compared to standard fixtures.

as well as 764 pound of home e-waste. As a result, a total of 1.5 tons of

Achieving exemplary performance for the Custodial Effectiveness

durable goods was recycled and thus diverted from the landfill.

Assessment. The property continued to implement its High Performance 27

Replaced 50 watt lamps in elevator cabs with 7 watt LEDs

Mitigating 25% of rainfall on site. Existing vegetation including turf, storm water runoff.





all air handling units.

mainly attributed to the use of fuel-efficient cars, as well as telecommuting and carpooling by building occupants.

Implementing all low-/no-cost Energy Conservation Measures (ECMs). An

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Social Our goal is to create a positive impact for our stakeholders and community through meaningful engagement, contribution, and volunteerism.

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S O C I AL

Tenant Engagement Our tenants play an integral

Green Tenant Improvement Guide

role in our sustainability efforts.

We encourage tenants to green their interior spaces during

We engage and equip them with

tenant improvement alterations. The Green Tenant

the resources they need to

Improvement Guide provides a starting point for tenants to

create a healthier and more

learn about the benefits of green building and fostering a

efficient work environment.

sustainable work-place for their employees. This guide outlines

Colony Capital’s tenant engagement

and environmental impact.

tools, resources, and initiatives are enabling tenants to make smarter

low-cost and best practice strategies to reduce resource usage

Green Office Guide

design and operating decisions to

Colony implemented a Green Office Guide to empower tenants

reduce their environmental footprint.

to take advantage of several simple and low-cost behavior strategies to help make their environments more efficient and sustainable. Some of the recommendations include ways to reduce energy use from plug loads and improve recycle rates. Green Leases Colony is in the process of integrating green leasing provisions into standard lease terms, including requirements or incentives to participate in data and cost sharing. Tenant Communications We engage with our tenants via memos and newsletters to communicate upcoming events and other opportunities to get involved.

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S O C I AL

Tenant Engagement Bike to Work Week

Earth Day and Green Office Strategies

May is national bike month which includes National ‘Bike to Work’ week. Colony

Over half of all energy used in a typical commercial office building is under the

Capital encouraged all its property managers to organize ‘Bike to Work’ events.

control of the building occupants. Making even small changes can greatly

The Tenants and staff who participate not only reduce greenhouse gas

reduce operating expenses and have a dramatic impact on a building’s carbon

emissions that would otherwise be emitted from vehicles, but also improve their

footprint. During Earth Day on April 22, Colony Capital encouraged all its

health and productivity by going green! During the 2014 National Bike

Property Management teams to join in the effort to create more efficient and

Challenge, the 47,500 participants eliminated nearly 22 million pounds of

healthier places to work.

greenhouse gas emissions by riding their bikes instead of driving. Highlight Linda McDonagh, a Colony Capital property manager who manages 21 properties in greater Chicago region, created further incentive for participation in the Bike to Work Week event by announcing a prize drawing. The

A memo was sent out to the tenants to join 1 billion other participants around the world to celebrate Earth Day, which is a worldwide movement that continues to inspire, challenge ideas, ignite passion, and motivate people to

take action towards environmental issues. The 2016 theme for Earth Day was ‘Trees for the Earth’.

participants were required to send a picture of themselves on their bikes. Each

In honor of Earth Day, Colony Capital also created and distributed a Green

winner won an Irv & Shelly’s Fresh Picks box worth $30. Here are some of the

Office Guide as part of the Tenant Engagement Program. The guide offered

winners: Kevin and Jeff from Morton Grove, IL and Beth from Niles, IL.

practical tips and low-cost strategies to save on energy costs, reduce waste, commute to work sustainably, and create a healthier workplace. It also offered simple strategies on how to green their spaces like turning the lights off when not in use, carpooling, using reusable mugs and dishware, going paperless, and actively participating in recycling programs. These simple behavior changes can result in billions of dollars saved on an annual basis. Colony Capital encourages the tenants to work together with their property management team to create a more efficient and healthier work environment and be a leader in sustainability.

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S O C I AL

Social Responsibility Colony embraces social

Highlights 

Pet Adoptions

responsibility as a key com-

YMCA Stair Climb Downtown L.A.

Colony employees participated in

ponent of our overall corporate responsibility program.

several pet adoption events during

Twenty Colony employees

2015 with Beople's Buddies Animal

participated in the 22nd Annual

Rescue, including the Super

As a corporate citizen, we value our

Ketchum-Downtown YMCA’s Stair

commitment to our employees,

Climb in September 2015. The team

tenants, and the communities in

helped to raise critical funds and

which we work. We support local

strengthen impactful YMCA

and national causes by engaging our

community programs for children,

In November 2015, Colony Capital

employees through volunteering and

teens, families, and seniors in the

held a community event to install

charitable giving.

most underserved neighborhoods of

drought-friendly mulch at Redwood

downtown Los Angeles.

Business Park (a CRP Fund I

Adoption event led by Best Friends Petaluma Mulch Project

Animal Society. The event brought

(“Mulchstock”)

together thousands of people who helped rescue or adopt over 500 animals from LA’s overcrowded city and county shelters.

investment). With the help of the City of Petaluma, California, which supplied the mulch through its Mulch Madness program, and the Sonoma County Water Agency, volunteers replaced 64,000 square feet of lawn and installed a drip style irrigation

system expected to save an estimated 1.6 million gallons of water every year.

Milk & Bookies Event Colony’s Adrian Stuessy hosted a Milk & Bookies book donation party highlighting the importance of reading and sharing our books with those that are less fortunate.

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S O C I AL

Partnerships and Programs Colony partners and collaborates with the leading organizations that are pioneering sustainable real estate and green building.

ENERGY STAR Portfolio Manager: Colony Capital has

GRESB: Colony Capital will be participating in the

created profiles for more than 250 properties and is moving

annual Global Real Estate Sustainability Benchmark

towards benchmarking all assets in the EPA’s ENERGY

(GRESB) survey in 2016. GRESB is an industry-driven

STAR Portfolio Manager tool in order to measure, manage,

organization committed to assessing the sustainability

and reduce energy and water consumption.

performance of real estate portfolios around the globe.

U.S. Green Building Council: As a member of the

NAREIT: As a NAREIT Member and participant in

USGBC, Colony Capital, has access to educational

NAREIT’s Annual Leader in the Light Working Forum, Colony

resources, expert advice, and international notoriety in

Capital will be at the forefront of sustainability in the U.S. by

support of greening buildings using the LEED rating system.

collaborating with industry leaders to exchange sustainability insights and expertise.

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S O C I AL

Education and Outreach We aim to ensure that our employees, service providers, and tenants have

Colony has developed many internal and

the knowledge and resources necessary to create more efficient and

external education programs to communicate

sustainable built environments.

and promote sustainability across our business among all stakeholders:

Colony Capital provides ongoing training and education to our employees and service providers on best practices in energy efficiency, resource conversation, and property management. All employees and tenants have access to a wide range of sustainability resources including policies, our Green Office and Tenant Improvement Guides, and many

Internal Programs



Sustainability resource site

engaged in our sustainability goals and programs through our new Sustainable Properties



Employee email communications

Award, which honors top performing properties at the end of each year.



Newsletters

other reference materials. We also plan to recognize employees and partners who are

External Programs

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

Corporate sustainability site



Annual sustainability report



Tenant Improvement Guide



Green Office Guide



Green Office Challenge



Nationwide e-waste drives



Vendor and tenant memos

C AS E S T U D Y

5100 River Road Schiller Park, IL CRP III

LEED EB Silver 88 ENERGY STAR Score

27% Water Reduction

27% Emissions Reduction

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C AS E S T U D Y

5100 River Road Schiller Park, IL LEED for Existing Building Silver

As the result of changes implemented in 2011, 5100 River Road's ENERGY STAR rating increased 10 points. The building was benchmarked using the US EPA's ENERGY STAR

website in order to track and measure the performance and overall success of the project. In January 2012, the building received its official ENERGY STAR designation.

Building Highlights



Class A, 145,711 sq. ft., four-story office building built in 2000



Achieved LEED Silver in 2012



88 ENERGY STAR performance rating — 13% increase from 2011 baseline score of 78

Sustainability Features



Low flow/flush fixtures



Garage lighting retrofit resulting in 45% reduction in kWh



Installed lighting sensors



Retro commissioning completed and low cost no cost measures implemented set back schedule for the building systems

Savings and Reductions



27% reduction in energy consumption



27% reduction in GHG emissions



13% reduction in water consumption

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Reporting and Disclosure GRI Index About this Report

GRI Index

The 2015 Corporate Responsibility

GRI Disclosure

Reference

This Sustainability Report is

1

Letter from the CEO

2

Report details Colony Capital’s

written in accordance with the G4

3, 4, 5, 6, 7, 8, 9, 28

Company Profile

4

programs, goals, and performance

version of the Global Reporting

in the context of the three principles:

Initiative (GRI) and contains

34, 35, 36

Governance Structure

13

Environmental, Social, and

Standard Disclosures from the

Responsible Investment

8

Governance. This report covers the

GRI Sustainability Reporting

Case Study 1

15-16

operations and performance of our

Guidelines. The chart contains

Sustainability Commitment

9-10

portfolio of owned assets for the

the corresponding GRI Content

year ending December 31, 2015.

Index based on the G4 indicators.

EC8

Targets and Performance Goals

11-12

Data is tracked in the U.S. EPA’s

EC8

Certified Buildings

22-23

ENERGY STAR Portfolio Manager

56

Sustainable Operations

18

2, EC2

Risk Management

19

Performance Indicators

24

Sustainability Initiatives

25

Case Study 2

26-27

EC8

Sustainability Policies

20

EC8

Tenant Engagement

29-30

EC8

Social Responsibility

31

16, EC8

Partnership Programs

32

LA10

Education and Outreach

33

Case Study 3

34-35

Reporting and Disclosure

36

tool and reported in the annual GRESB assessment. All performance indicators and metrics mentioned in this report include data

EN3, EN5, EN6, EN8, EN-15, EN16, EN-17, EN19

from calendar year 2015 for assets owned during the year end December 31, 2015. All assets sold prior to January 1, 2015 and acquired after December 31, 2015 have been excluded from this report. Please visit our website for additional details on our Corporate Responsibility program. 28, 29, 30, 31, 32, 33

GRI Index 36

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Page

515 South Flower Street 44th Floor

Los Angeles, California 90071

For more information about this report, contact: Corporate Responsibility Team [email protected] © 2016 Colony Capital, Inc. 37

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