How Does Energy Efficiency Increase the Value of a Commercial Building?

Too many businesses are unaware of the full financial impact that a strategic approach to energy management can have on the value of their buildings.

Sure, improving energy efficiency will help reduce your buildings’ electricity bills. But that’s just one of the many ways to measure the impact on financial performance. How your organization approaches energy management can have a significant impact on both the bottom and top line financial performance of your commercial buildings.

Here’s a look at some of the ways that improved visibility into energy and operational data is enabling businesses to increase the value of their buildings.

Reducing Operations and Maintenance Costs

Energy data reflects how your buildings’ equipment is performing at any given moment, and the insights it provides can enable your facilities teams to take a more efficient approach to maintenance.

This capability was a key factor of the energy strategy for a portfolio of retail banking branches. With sites located across North America, the company faced a clear opportunity to reduce energy costs by implementing measures to improve efficiency, but needed to keep disruption at the site level to a minimum.

To address these concerns, the engineers tasked with managing building operations for the company evaluate recommended measures to improve energy efficiency from EnerNOC’s energy intelligence software before moving ahead with service calls, then determine if a measure can be implemented remotely. By eliminating the need to manually inspect equipment at the site level, the company is able to reduce the amount of money and time spent on service calls—while also avoiding disruptions to operations.

Reduced Capital Investments in Equipment

Beyond the impact on operations and maintenance, increased visibility into equipment performance has also enabled businesses to make more informed decisions regarding capital investments.

One commercial real estate business was able to eliminate the process of manually replacing the valves on hundreds of terminal units installed at their properties. To prevent the valves from degrading over time, the company routinely purchased replacements for all of the valves, with the burden of manually replacing each valve placed on their facilities teams. But once the company incorporated tools that notify facilities teams when valves are malfunctioning, the company not only reduced costs by adjusting their maintenance processes, but reduced capital investments by only purchasing valves when they needed to be replaced.

This is just one example, but when scaled across all equipment over an entire portfolio of properties, this kind of visibility could have a significant cumulative effect on capital investment.

Higher Lease Rates, Selling Prices for Energy Efficient Properties

With customers, investors, and even employees increasingly expecting businesses to show a commitment to energy efficiency, research shows that tenants are willing to pay a premium for buildings that help them meet these demands.

One-third of respondents to a McGraw Hill Construction survey said they would pay a premium for green retrofitted space. More specifically, a CoStar study of the Los Angeles commercial real estate market found that buildings with ENERGY STAR and LEED certification were able to command higher lease rates per square-foot and also sold at a higher rate than asking price compared to the average rates for the region.

Improved Tenant Comfort

A key component of tenant retention efforts is the ability to maintain a positive experience in your buildings.

That was the driving force behind one real estate development company’s strategy for an office park in California. Leveraging energy intelligence software to analyze data from building automation systems, the company’s engineers were able to identify measures that would have the largest impact on comfort. Through this proactive approach, the company was able to reduce reactive tenant requests by 67% even while occupancy grew by about 40%.

To capitalize on this opportunity, businesses are taking a comprehensive approach to their energy management strategy. To understand what goes into a successful strategy, download Energy Strategy for the C-Suite, an in-depth report based on research conducted by EnerNOC, PwC, and Winston Eco-Strategies into the emerging trends in the market and the practices that businesses are using to turn energy management into a competitive advantage.

See what goes into a successful energy management strategy with this strategy brief
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Authored By Colin Neagle

Colin is a marketing manager for EnerNOC and editor-in-chief of the EnergySMART blog.

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