Climate Corps: The Benefits of Monitoring Your Building’s Performance

EDF Climate Corps

Climate Corps: The Benefits of Monitoring Your Building’s Performance

[Editor's note: This blog is part of a series from the 2009 Climate Corps fellows. The program, from partners Environmental Defense Fund (EDF) and Net Impact, pairs MBA students with companies to identify energy efficiency opportunities and develop actionable strategies that help host companies reduce costs, energy use and greenhouse gas emissions.]   

With falling asset values and limited access to capital, many in the real estate industry are spending their time on the next best thing to doing deals: going green. Not only do energy and water efficient buildings have relatively low operating costs, asset managers report these buildings also have high occupancy rates, quick space absorption and proud tenants.

As a Climate Corps Fellow, I am working with Grubb Properties to identify and evaluate energy efficiency improvements for their portfolio of commercial and multifamily real estate in Charlotte and Raleigh, N.C. In addition to working with existing buildings, I am also collaborating with the development team to create efficiency guidelines for new construction. I have helped internal committees establish company sustainability practices and evaluate the feasibility of using renewable energy to light buildings.

Last week, I attended the Urban Land Institute’s Investing and Developing Green conference to get a better sense of where the real estate industry is heading and the best ways to get involved with the green movement.

While there is still uncertainty as to how green will play out in the real estate industry, one theme from the conference, the Climate Corps Fellowship training and my experience at Grubb Properties is the trend toward monitoring building performance, reporting the information publicly, and including energy efficiency as part of ongoing, preventative maintenance.

Monitoring?
Whether it is through a simple spreadsheet or complex energy management software, more building managers are beginning to monitor their building’s annual resource consumption. The EPA’s free online Energy Star Portfolio Manager is popular with institutional investors because it enables managers to enter data about existing buildings -- office, retail and even multifamily -- and benchmark their performance against similar and competing buildings. This program adjusts for climate, energy costs, building size and even occupancy rates so that managers can track their building’s progress over time.

Although energy and water can account for between 20 percent and 30 percent of a building’s operating cost, many building managers lack a system to quantify how resource consumption has changed over time, even after making relatively simple investments in lighting and bathroom fixture upgrades. But, as retrofits get more complicated and expensive, owners (and buyers, too) will want to know just how their investment in HVAC or lighting controls is paying off in terms of lower operating cost and higher building values. If building managers start monitoring electric, gas and water consumption today, they will be able to quantify the savings and added value tomorrow.

Reporting
According to a source at the ULI conference, only about one-third of existing buildings could ever achieve LEED certification -- but that does not mean an existing building cannot run efficiently. The Energy Star Portfolio Manager and its benchmarking process allows building managers to identify and resolve systematic problems, start tracking investments in energy efficiency, and support a marketing platform to attract new tenants and excite existing tenants and employees who may be interested in a more environmentally friendly space.

In Europe, all buildings are rated in terms of resource efficiency and now display, or soon will, those ratings for tenants and visitors to see, much like a health inspector’s certificate. This may soon become standard practice in the U.S., as well. Building owners who start benchmarking and reporting energy consumption now will have a much easier time -- and likely more favorable scores -- by the time they have to actually start reporting that information to the public.

Ongoing Maintenance?
When buildings are designed to meet standards for energy efficiency and other environmental attributes, trusting owners and managers assume buildings will perform as designed and will continue to do so. However, this is generally not the case. Engineers, developers and property managers at the ULI conference claimed that in most cases, “commissioning” -- the process which is required for LEED certification when a third party evaluates and verifies whole building performance -- more than pays for itself by discovering costly inefficiencies due to poor installation or simple wear and tear. This type of thorough, systematic, unbiased assessment will add years of life to any building -- LEED certified or not.

While most existing buildings will never qualify for LEED certification because of inherent design characteristics, that doesn't mean they can't perform more efficiently. By tracking a building’s energy and water use performance, building managers can monitor the effectiveness of programs, compare one building to its competitors, quantify and communicate progress with tenants and keep occupancy levels high.

Lindsay McCombs, a 2009 Climate Corps fellow and Net Impact member, is pursuing a Masters of Business Administration degree at the University of North Carolina.

Building image -- CC licensed by Flickr user Le Enfant Terrible ?; Graph line image -- licensed by stock.xchnge user cobrasoft .