![\"SL](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/10\/OVA-Day-View-from-30-Rock.jpg\")
<\/a>SL Green Realty Corp.’s One Vanderbilt, under construction next to Grand Central Terminal in Midtown Manhattan, is a candidate to become among the fist buildings in New York City to achieve LEED v4 Gold certification.<\/p><\/div>\n
Across asset categories and around the country, commercial building owners are making great strides in trimming energy use. Aggressive measures on multiple fronts demonstrate a commitment that benefits both the environment and the ledger. Yet even after a decade of rapid progress, it is fair to point out that owner\/operators and their advisors are still leaving untold millions of dollars on the table every year.<\/p>\n
The bright side, of course, is that sophisticated tools and strategies are available to mine this vast untapped opportunity for savings. According to an estimate by the U.S. Environmental Protection Agency\u2019s popular Energy Star program, improved energy management can shave anywhere from 2 to 10 percent off energy bills annually.<\/p>\n
Given the share of operating expenses that flows toward utility bills, these are attention-getting figures. In 2015, the most recent study of more than 5,200 ofice buildings in the U.S. and Canada commissioned by the Building Owners and Managers Association International found that utility costs averaged $2.16 per square foot last year. That represents more than one quarter of the average $8.07 per square foot average operating expenses. Of note, last year\u2019s figure represents a significant decline from the $2.34 average utility expense tallied in 2014. Whether this stems from lower oil costs, more efficient conservation measures or a combination of the two, the trend will be worth watching in 2017.<\/p>\n
One of the trends to watch during the next few years will be the rise of benchmarking. Though the practice continues to draw controversy in some circles, it is proving to be both useful and underutilized.<\/p>\n
<\/a>Adam Sledd, Director of Market Engagement at IMT.<\/p><\/div>\n
\u201cBenchmarking is having the desired effect in municipalities from which we have data\u2014it\u2019s making energy efficiency something people are aware of and giving them information on how they can proactively measure energy at their properties,\u201d said Adam Sledd, director of market engagement for the Institute for Market Transformation<\/a> (IMT). \u201cPeople are just scratching the surface of using and analyzing this data. We now have a new treasure trove of information to work with in targeting buildings for energy efficiency.\u201d<\/p>\n Recent research underscores the value of benchmarking. Commercial buildings that regularly monitored and evaulated their energy performance using Energy Star\u2019s Portfolio Manager, for instance, cut their energy outlays 7 percent over three years. For a 500,000-square-foot office building, that equals a cumulative cost savings of $120,000, and for a medium-size box retailer with 500 stores, $2.5 million.<\/p>\n \u201cYou can\u2019t get anything done without benchmarking data,\u201d noted Sara Neff, senior vice president of sustainability for Kilroy Realty Corp.<\/a> \u201cIt\u2019s the foundation of everything you do, and helps you determine, for instance, whether a technology is a good investment.\u201d<\/p>\n Yet while the proliferation of benchmarking is central to wise energy spending, even strong proponents express concerns about mandates. \u201cThat, we don\u2019t support,\u201d said Bob Best, JLL<\/a>\u2019s head of energy and sustainability. \u201cIt\u2019s government telling us how to run our buildings. It\u2019s better to just share information and let the buildings figure out how to improve their performance\u2014that\u2019s how it works best.<\/p>\n In mature markets, the larger conversation is about retrofitting older inventory as developers and owners look for differentiators, according to Robert Ioanna, senior principal at Syska Hennessy Group Inc.<\/a> Syska Hennessy, for instance, worked on restacking a 2 million-square-foot, 1950s-era office tower in Midtown Manhattan. Its new MEP system includes high-efficiency air conditioners, daylighting controls and greywater reuse, and the building achieved a LEED Platinum certification, a challenging feat for a retrofitted property.<\/p>\n Neff was recently elected vice chair of BOMA International\u2019s Energy and Environment Committee, and one of her priorities is to bring more attention to the middle market. \u201cLEED and Energy Star certifications are synonymous with Class A buildings in many markets,\u201d she said. \u201cHowever, the middle market is not on this train, and we at BOMA have to figure out how to reach this market. It won\u2019t be through the creation of a new rating system but by engaging brokers and tenants\u2014listening instead of talking at them, and finding out what the barriers to entry are.\u201d<\/p>\n Kilroy Realty Corp.’s 333 Brannan St. and 350 Mission St., recently completed LEED Platinum buildings in San Francisco.<\/p><\/div>\n Working Smarter<\/strong><\/p>\n As with all other aspects of building performance, cost-saving technology continues to advance. \u201cThe Internet of Things holds the answers to optimizing every function in a building,\u201d Ioanna asserted. Owners and property managers can now quickly\u2014and cheaply\u2014collect data that can help buildings operate more efficiently. \u201cThe smartest property owners that work with the right vendors and consultants to figure this out will wind up having a significant competitive advantage in the marketplace.\u201d<\/p>\n As owners, developers and managers become more sophisticated about energy efficiency, they are increasingly open to cost-saving innovations ranging from energy and sophisticated total cost of ownership modeling to alternative, high-efficiency HVAC strategies, Ioanna contends.<\/p>\n Operators in the U.S. are beginning to catch up to smart-building practices that are well established overseas, where a common network oftentimes incorporates building management systems, fire alarms, elevator controls and other operational systems, Ioanna said.<\/p>\n At SL Green Realty Corp.<\/a>, for example, one favored tool is EnergyDesk, a real-time, web-based energy monitoring program that looks at energy consumption in five-minute, 15-minute or one-hour intervals. Operations staff \u201ccan then pick up the phone and ask the building engineer about disparity in occupancy, loads and equipment use,\u201d said Edward Piccinich, the firm\u2019s executive vice president & director of property management and construction.<\/p>\n Artificial intelligence, too, is gaining ground as a cost-saving tool. One early adopter, JLL, has been implementing proprietary technology for several years. Its IntelliCommand software provides real-time remote facility monitoring and control and gives the management team the data necessary to make adjustments.<\/p>\n \u201cIt\u2019s similar to the computer in your car that tracks such things as air and gas inflow, making adjustments as needed to maximize performance,\u201d said Best. \u201cBy using smart building technology, we can do the same thing with building systems, leading to 10 to 20 percent reductions in energy use.\u201d<\/p>\n While a growing number of owners are embracing new tools, it may be several years before today\u2019s leading-edge technology is widely adopted, predicted IMT\u2019s Sledd. In the meantime, there is no shortage of opportunity to trim consumption and costs with more established techniques. \u201cWe are still seeing things that have been around for a couple of years that still aren\u2019t widely used, like installing advanced power strips,\u201d he explained. \u201cThere\u2019s still a lot of room for change and growth.\u201d<\/p>\n Lighting, for example, offers plentiful potential for savings, yet too often, those opportunities are still missed. \u201cIn office buildings, people don\u2019t realize how much energy is used for lighting\u2014it could account for 30 to 40 percent of electricity (consumption),\u201d Best pointed out. That is prompting forward-thinking owners and managers to install LEDs<\/a>, which typically use 80 to 90 percent less energy than conventional incandescent bulbs. Besides their cost-saving benefits, LEDs offer flexibility; they are longer lasting than conventional bulbs and can be regulated by sensors and wireless controls.<\/p>\n Sara Neff, SVP of Sustainability, Kilroy Realty Corp.<\/p><\/div>\n<\/a><\/a>