As new buildings continue to be built to LEED standards, existing buildings that do not implement green/energy retrofit projects, will increasingly struggle to maintain rents and occupancy levels. Those who take the business as usual approach, will see asset values dropping against their peers.
Increasingly, property management firms are being pressured to find new ways to maximize profits and the asset valuation of their commercial and industrial facilities. Many implement cosmetic solutions as they are easily identifiable. However, a commonly overlooked approach is the investment in green/energy efficiency projects.
Energy consumption within a facility, represents one of the largest expenses a facility owner contends with.
Energy efficiency projects are a great solution for increasing asset value as most organizations can achieve annual energy savings between 2-10 percent. Which begs the question, Why are so many property managers and owners apprehensive about addressing this strategy aggressively?
When polled, two of the most common responses to this question are;
1. Lack of knowledge or understanding of energy conservation opportunities and benefits.
2. Inability to fund projects.
*Almost 50% of energy efficiency projects fail to be implemented due to capital budget.
Tenants want real estate with lower leasing rates, and a significantly growing number of organizations are implementing leasing policies mandating environmentally friendly spaces. Consumers and employees are increasingly seeking to associate with organizations that are environmentally responsible. All adding to the value proposition of implementing energy efficiency projects which increases asset value.
Recent studies identify that when well researched green/energy efficiency projects where implement resulted in the following metrics:
So, where should you start?
Before projects are implemented, we must understand our facilities energy profile so that intelligent and strategic decisions are made in relation to our goals. ASHRAE Level energy audits, are a great starting point as they identify the where, when, why and what of your facilities energy profile. Not only does the ASHRAE level energy audit provide energy conservation measures, but details key financial indicators such as IRR and NPV. Setting the stage for selecting solutions that directly affect the bottom line and increase asset value.
The study results above indicate 77% of facilities gather energy data from their utility bills. While this metric provides an overview of energy consumption, it does not help the organization understand a facilities energy breakdown. Therefore optimizing the assets performance cannot be achieved.
To maximize your facilities performance over the life of the asset, implementing an energy management information system (EMIS) is paramount. The energy management information system provides real-time energy analytics at the device level, providing invaluable details of your facilities areas of energy waste. Additionally, the energy management information system provides continuous measurement and verification ensuring life long performance optimization of the asset.
As the saying goes, you cannot manage what you do not measure!
Thankfully with the push for greener more environmentally friendly facilities, alternative funding sources for energy efficiency projects are becoming more readily available. These new funding sources eliminate the capital budget constraint of decision-makers, enabling them to now strategically implement social and profit-conscious decisions related to their assets.
Implementing 1 or both of these solutions will make measurable differences within your asset. The best thing you can do, is pick one and start the process.
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