Energy Efficiency Measures Deliver Outsized Income Gains

Building owners and managers should look at even modest energy efficiency upgrades as a three-legged stool supporting stronger net operating income, says Patty Anderson of the McKinstry sustainability consulting firm.

Building owners and managers should look at even modest energy efficiency upgrades as a three-legged stool supporting stronger net operating incomes, says Patty Anderson, an account executive with the McKinstry sustainability consulting firm in Seattle.

And senior executives should look to arrange these stools around the company-wide table.

As buildings are likely to become 3 to 5 percent less efficient each year absent pro-active efforts to improve performance, owners and managers who aren’t tracking energy use need to start measuring system performance, Anderson stressed at BOMA International’s Every Building conference in Seattle.

An industry-wide problem is that hardly one of every five U.S. office buildings gets the benefit of truly actionable energy tracking, she lamented.

The second key cog in the performance-improvement wheel is to respond to the tracking results with appropriate efficiency-boosting investments – which don’t have to cost a lot, she continued.

She pointed to a Lawrence Berkeley National Laboratories study for the federal General Services Administration indicating investments amounting to as little as $2 per square foot might generate energy savings of 4 percent – and overall operating cost savings perhaps in double digits.

Equally important is follow-up communication about the upgrades – and corresponding benefits and goals – with existing tenants as well as the marketplace generally, Anderson added. So make the effort to demonstrate the practical implications of data flowing from those new dashboards and smart meters.

“Performance validation is what sells, not just (rating system) certification,” Anderson continued. Tenants are attracted to properties that consume energy efficiently – holding down costs while reducing greenhouse-gas emissions.

And that ultimately translates to higher occupancies and rents – and it turn values, Anderson stressed. “So the process is to sense (with tracking), then react (with upgrades), and then interact (with tenant communication).”

These are processes that need to be duplicated at each portfolio property and integrated into corporate cultures, Anderson also suggested.

And that requires a collaborative effort. IT, finance and facilities management pros all need to work closely together to measure and communicate performance, plan technological and operational strategies, and operate facilities insightfully, she concluded.