The IFMA Foundation has released another informative and impressive White Paper on sustainability issues that impact commercial real estate owners. The White Paper, The Economics of Sustainability in Commercial Real Estate was written by Kristian Peterson and Ross Gamill. I have included some highlights from their report.
"Numerous studies have shown that retrofitting an office building with energy efficiency improvements can significantly reduce operating costs, yet many existing office buildings have not been retrofitted. The objective of this white paper is to explain the incentives and motivations of various parties throughout the real estate management chain so that real estate managers can better understand why investments in energy efficiency are not more prevalent. The white paper focuses specifically on existing office buildings.
The energy efficiency of a building is limited by how the building is designed, engineered, constructed, operated and maintained. Achieving greater energy efficiency in an existing building depends on several factors, including the building envelope, system types and efficiency, energy end use, such as plug loads, and building operation and maintenance practices. The efficiency of the building envelope impacts the energy load for the building, including the required energy used to heat, cool and ventilate.
Simple strategies to reduce heating and cooling loads include appropriate insulation, optimizing window glazing area, minimizing the infiltration of outside air, and using an opaque roofing material. Additionally, the envelope impacts the lighting load for the building, depending upon how much natural daylight penetrates through windows into the interior spaces. Common design features include the enhancement of natural daylight into a building through the use of skylights, light shelves, tubular daylighting and other means of daylight harvesting. Mechanical systems impact building energy efficiency based on the age of the equipment, repair and maintenance program, and whether systems are operated as designed and have been commissioned.
The efficient use of energy impacts the operating cost of a building. The average cost of energy for a typical commercial building may depend on several factors, including the geography, climate, building type and location. Energy costs are also one of the most controllable expenses unlike other major line items, such as taxes and insurance. The energy expenditure for all buildings is $1.09 per sq. ft. ($11.73 per square meter) (US dollars) and $1.40 per sq. ft. ($15.07 per square meter) (US dollars) for office buildings (CEBECS 2003).
Energy prices have significantly increased over the past several years, underscoring the importance of energy efficient operations. Since 2000, average commercial energy prices have increased approximately 25 percent (Ciochetti & McGowan 2009).There is a wide range of solutions available to increase the efficiency of a commercial building. One way to look at these solutions is to categorize projects by expected initial cost. Categories might include no-cost improvements, low-cost improvements and significant cost improvements (Dirksen & McGowan 2008) (Table 1).
No-cost improvements
Seal window and door frames
Change filters regularly
Replace washers and cartridges in leaking faucets
Replace light bulbs
Review current building operating procedures
Lighting is a low-cost improvement with significant energy reduction potential. A lighting retrofit may include replacing lamps, ballasts or the entire luminaire (both the lamp and ballast). For example, simply replacing 40W T12 lamps and magnetic ballasts with 32W T8 lamps with standard electronic ballasts could save 87W and $39 (US dollars) per fixture per year (Conley 2010). A second example would be replacing a wall-mounted light switch with an occupancy sensor, where appropriate, can reduce energy consumption up to 25 percent (Roberts 2009). It should be noted that any solution should be evaluated not only on cost but holistically. For example, providing a tenant control over ventilation may reduce cooling loads and also improve occupant comfort.
To read the full report please visit-http://www.ifmafoundation.org
About the authors:
Kristian Peterson is an expert in strategic decision making regarding energy efficiency improvements in commercial office buildings. He recently received his Master of Science in Real Estate Development from the MIT Center for Real Estate. Before pursuing his master’s, Kristian spent three years advising executive management at a private real estate investment company where he performed site and market evaluations to establish asset market value and create building proforma.
Ross Gammill
Ross is director of commercial due diligence at Allonhill, a Denver-based provider of both residential and commercial mortgage due diligence. Prior to Allonhill, Ross was an underwriter for Bridger Commercial Funding, a commercial mortgage-backed securities conduit lender. At Bridger, Ross was involved in transactions totaling over $400 million (US dollars).
Lighting Retrofits Save Energy
Considering a lighting retrofit for your office building? You need the expertise and wide selection of lighting products available from Value Energy Solutions. They are one of the largest lighting retrofit companies in the nation. Based in Atlanta, GA. they have been helping building owners reduce their energy bills for almost three decades. To talk with one of their lighting consultants please call (678) 501-4880 or visit their lighting retrofit website- www.valueenergysolutions.com
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