3 Innovative Ways Commercial Real Estate Businesses are Using Energy Data
Last week’s Building Energy Summit in Washington, DC, provided some valuable insight into the challenges facing the commercial real estate (CRE) world today.
The rapid development of technology deployed at the site level—such as the Internet of Things, cloud computing, and big data analytics—gives today’s CRE businesses unprecedented levels of visibility into building operations. But with ubiquitous access to this technology throughout the industry, businesses are finding innovative ways to apply that technology to adapt to their evolving market challenges.
During a panel discussion at the event, five industry leaders discussed the challenges they face in the market today. Here are three ways these organizations are using their visibility and data resources to gain a competitive advantage.
Maintaining Optimal Tenant Comfort
Tenant comfort and satisfaction have long been at the top of the list of priorities for CRE businesses. But this challenge is evolving as tenants’ expectations for their work space continue to evolve.
Greg O’Brien, CEO of Americas for JLL, said during a panel at the event that this trend has had one major impact on how CRE businesses interact with their customers—the conversation with tenants has expanded from purely financial to include elements of human resources. Tenants are increasingly concerned with how the experience in their work space will enable them to attract and retain highly skilled and specialized talent.
To meet these expectations, CRE businesses are investing in the tools that will enable their staff to maintain an optimal environment. Cavarly Garrett, Executive Director and Real Estate Asset Manager at JP Morgan, said the company supports investments in technology if they know it’ll drive tenant satisfaction. Whether or not the tenants recognize every effort toward maintaining comfort, Garret said it's the behind-the-scenes work that keeps them happy.
Enhancing Productivity Across the Portfolio
All of the panelists agreed that using energy and operational performance data to improve productivity is essential to getting the value out of their technology investments. Kevin Kampschroer, Director in the Office of High-Performance Buildings for the US General Services Administration (GSA), said his organization recognized that installing an advanced energy meter isn’t necessarily going to change how their buildings use energy, but how the organization uses that technology is what will have an impact on efficiency.
Kampschroer said that a statistical analysis of operations at more than 200 buildings found that the high-performance buildings saw a 19% improvement in energy efficiency, 16% reduction in operating expenses, and a 9% improvement in tenant satisfaction as a result of their use of energy efficiency data. Overall, project managers were able to exceed their targets for improvements in energy efficiency by 7%.
John Gilbert, Chief Operating Officer and Executive Vice President at Rudin Management Company, said his organization is using data to implement innovative measures that can help reduce overall energy consumption and spend. For example, comparing data on their HVAC systems with their buildings’ operational schedules led the company to modulate fan speed when tenants left the office for lunch, which had an immense impact on daily energy consumption.
Promoting Energy Efficiency Progress Strategically
Today’s CRE businesses are finding this wealth of data also provides the ability to understand where they should direct their efforts and better demonstrate the value of these efforts to their customers.
Garrett said JP Morgan uses the Global Real Estate Sustainability Benchmark (GRESB) to assess their entire portfolio, see how their practices compare with those of their peers, and gain an understanding of the types of questions they should be asking about their energy efficiency strategy. In this sense, GRESB drives value both internally and externally—providing benchmarks for their buildings sustainability performance while also communicating their successes to investors.
Businesses can also use this data to demonstrate the impact of energy efficiency measures to tenants. Gilbert said that the ability to visualize data on buildings’ energy use and occupancy trends has helped tenants embrace their efficiency measures. In one example, a tenant decided to adjust their air conditioning schedules after seeing how much they could save by aligning it better with occupancy trends.
These are just some examples of how technology is enabling CRE businesses to get more strategic about energy. Learn more about what goes into a successful energy strategy with this in-depth report based on research that EnerNOC and PwC conducted into successful energy management strategies at leading businesses worldwide.