8 Tips to Turn Class B, C Offices More Energy Efficient

The latest Urban Land Institute report details low-to-no-cost measures to maximize these buildings' performance.

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While many Class A office buildings are securing their LEED Platinum and Gold certifications, Class B and C landlords often have a hard time competing with those same office sustainability standards. But Urban Land Institute’s latest report Unlocking Hidden Value in Class B/C Office Buildings outlines eight specific strategies to reduce energy costs and improve property values.

READ ALSO: ULI White Paper Guides Sustainability Over Entire Property Cycle

Oftentimes, those working at Class B or C office buildings lack the resources and the funding to tackle those lofty sustainability goals like green roofs or custom energy-efficient ceiling panels. But pursuing modest measures can save reduce 15 to 35 percent of a building’s energy costs, according to the report.

These eight measures include:

  1. Collecting the office building’s performance data with annual benchmarks. Tools, like the Energy Star Portfolio Manager, are a free way to track the data with minimal time invested.
  2. Hiring a local professional to conduct an energy audit of the building. There are often local utility companies or city agencies that offer funding to pay for costs.
  3. Implementing low-to-no cost measures. Quick and simple improvements include upgrading the building’s lighting to LED and optimizing the HVAC schedules and set-points. Additionally, landlords can conduct nightly walk-throughs to identify what lights and systems are unnecessarily running at non-business hours. Owners should also aim for preventative maintenance but if necessary, replace equipment with a more efficient model.
  4. Retrocommissioning the BAS and HVAC systems on a regular basis. Most Class B and C buildings go years without servicing and need system calibrations and upgrades to be as efficient as possible. 
  5. Considering capital improvements to the roof, HVAC or building envelope. While more expensive than the rest of the strategies, installing solar panels or replacing windows for a higher-efficiency model is a substantial way to reduce energy use.
  6. Bundling sustainability improvements into repositioning projects. If owners are looking to add value to their Class B or C offices, they should incorporate new fixtures, HVAC systems or building automation systems alongside their repositioning.
  7. Engaging tenants about energy efficiency. Creating a tenant guide about sustainable practices and talking to them about habits like turning off lights and unplugging appliances at night can be a simple approach to reducing energy costs.
  8. Incorporating green lease clauses. Working together with tenants on sustainability can be worked into lease agreements.

Taking these measures can translate into as much as $46,000 in reduced operating expenses, a 4.3 percent increase in the asset’s net operating income and an increased property value of as much as $627,000 for a typical 75,000-square-foot office building.

Going green on leases

Furthermore, if owners incorporate green leasing, where tenants work with landlords to commit to energy efficient practices, the net operating income can increase 5.6 percent and the property value can see up to $800,000 in growth.

Incorporating sustainability language into a lease may sound tricky, but there are common practice examples. According to the report, owners should document guidelines that establish and encourage energy efficient operations in the lease, so tenants are aware. With tenant fit-outs, landlords should also include energy efficiency standards for these fit-outs to ensure that the initial installation of any systems or appliances are efficient. And office owners can also include a mechanism in the lease, so that they can recoup the hefty upfront costs of installing an energy efficient measure, like a new HVAC system, from the tenants.

Combined, these strategies aim to help office building owners improve their energy efficiency while saving energy costs and making their property more attractive. These sustainability practices are even shown to leave tenants happier and more likely to renew their leases as they are given an opportunity to positively impact the environment.

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