Too Cool in Summer?
- Jul 02, 2012
The summer is a good time to be thinking about utilities. After all, air conditioning in innumerable buildings is usually blasting—and water consumption is likely higher, too, as employees try to beat the heat. As technology advances, opportunities to better regulate usage and make building operations more efficient are expanding. And since energy costs constitute a big number on the balance sheet, if a fairly stable one in recent years, initiatives that reduce electricity use can make a real dent in expenses. Does that mean no more freezing in the office, mall or movie theater in summer? I, for one, can only hope so!
Engineers and other building operations experts keep telling me that it’s not necessary to blast the air conditioning, and that building temperatures can be better regulated. I’ve visited office buildings, like those run by Hines, that automatically adjust internal conditions to the sun’s heat and changing weather conditions. But among commercial real estate properties as a whole, cutting-edge features like this remain relatively rare.
That in part is because energy-reducing technologies tend to be the realm of new development—understandably not exactly a frequent occurrence these days. But as sophisticated new tools proliferate, the options for retrofits—some of them simple—are also growing. These changes often come at a price, at least initially. But with time and wider adoption, costs continue to drop, and with a longer return horizon, the possibilities for savings are even greater.
As we report on innovations in sustainability and other areas of technology in CPE each month, a recurring refrain is that Americans tend to go for the short-term return, which can limit the menu of choices. But with cutting costs still a priority and owners stepping up their commitment to sustainability for a variety of reasons, investment in retrofits is also increasing. As Dees Stribling writes this month in “Turning Green,” spending on green retrofits could reach $15 billion by 2014. Add to that government programs like tax credits, grants and low-interest loans, some of which offer a short time horizon as a carrot, and the benefits start to add up (see “Plugging In” for more on utilities incentives and emerging best practices).
Some stellar examples of green retrofits rank among this year’s Distinguished Achievement Awards. The 10 winners in the second year of this annual program also include some market-changing moves in the form of strong client identification, market potential and effective repositioning to maximize good locations. I encourage you to read about the winners, view their properties in our slideshow and hear directly from the judges what these achievements tell us about the state of the commercial real estate market overall.