Real Estate News

Save Some Green By Going Green


www.eeintl.com.


Wednesday, February 14, 2018

Is your commercial real estatenbsp;energy efficient? Did you know the cost of power alone represents, on average, 9 of your operating costs? Are you doing what you can to use less energy to provide the same service?

As the commercial property market grows more competitive by the day, property owners are constantly searching for new ways tonbsp;add valuenbsp;to their properties. The good news is that there are numerous ways to trim expenses and the better news is that most apply to a single 5,000 square foot property as much as they do to a million-square-foot portfolio.

Not every building needs to perform like a trophy asset in Midtown Manhattan, but they should all be optimized to best serve the needs of the most likely mix of tenants. But, one thing is true across all asset types - lighting and HVAC account for up to 71 of energy consumptionnbsp;in commercial buildings. So, it only makes sense to make them the primary focus of an energy efficiency strategy. Some of the most common solutions include:nbsp;nbsp;

  • Window tint amp; films
  • Bulb and fixture replacement
  • Voltage optimization
  • Automation of utility usage using a Building Management System BMS
  • Interior amp; exterior roof insulation
  • Solar power installation

With utility rates expected to rise 26 to 42 by 2020, professional property owners and managers recognize that in order to remain competitive and increase the value of assets, energy efficiency needs to be on the top of the to-do list. Lets get down to the numbers.nbsp;

  • Implementing these solutions can result innbsp;30-50 monthly cost savings
  • ROI averages 6 months,nbsp;but depending on the building and which solutions are implemented, it could be anywhere from 1 to 24 months
  • Tax incentives and rebates are available at both local and state levels
  • Specialized financing is available, up to 5.5MM per building to do "green" improvements
  • Energy efficient properties can generatenbsp;up to a 10 premium on exit sale pricing

EXAMPLE:

Office Building with Monthly Power Bill of 12,000 50 is Demand = 6,000

EE applications installed save minimum of 30 of demand 6,0000.30 = 1,800/month

OR:

30 of 50 = 15 of net Cost Savings every month

Assume, Electric costs on Pamp;L account for 7

Therefore, 70.15 = 1.0 savings on Pamp;L = Pure Profit

There are multiple goals in the practice of sustainability. Increasing NOI by decreasing operating expenses is clearly in the interest of every property owner. Perhaps more important is the fact that delivering a better overall workplace experience for tenants helps them attract and retain the top talent they need to be more successful.nbsp;

nbsp;

When you increase the energy efficiency of your building, you win, your tenants win and the planet wins, too.nbsp;

Interested in learning more? Contact Marc Brener directly at 949 365-5823 or

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