Pursuing Energy, Part Two


Today, we’ll continue with more drivers for energy improvements beyond the most obvious “saving energy” or “saving money.”

Pursuing Energy, Part 2

 -Upgrading the user interface: If you can determine that your prospect is interested in having a better understanding of what's happening in the building, this would be a great “felt need” to leverage.

-Earning the ENERGY STAR® label or LEED® certification: There are a lot of people out there who want to save energy. Some just want the label (which is fine). If you're an income-property business, the ENERGY STAR® label might just be your ticket to higher occupancy rate, base rent per square foot, and sales price per square foot.  In fact, you’ll find data from numerous studies done in the last several years that prove those impacts.

-Avoiding an embarrassing energy performance score: If you’re a building owner, there’s a tremendous opportunity for praise or embarrassment based on your energy performance score. Let’s say you're going to sell, lease, finance, or refinance a building and you must disclose to the counterparty in that real estate transaction what the energy performance of the building is. Imagine you're getting ready to close escrow. Right before the transaction closes, you must slide a piece of paper across the table that says your building scores 16 on a scale of one to 100. Ouch. You’ll likely be embarrassed to do so – and what if the buyer makes a “set-aside” of dollars for efficiency and/or upgrades a new prerequisite for closing the transaction? Double ouch! And from the broker’s standpoint, if you're a leasing, mortgage, or sales broker, the last thing you need is a controversial piece of paper with a provocatively low score on it standing between you and your commission.

-Avoiding budget cuts: Municipalities are always trying to keep firefighters, police officers, teachers, and other government workers employed. Energy efficiency is a great way to do so in a responsible fashion.

-Saving a project manager's job: One of our students told me a story about a project that he sold to a municipality. He asked them why they decided to do the project. It turned out that it wasn't to save energy. It wasn't to demonstrate good governance. It wasn't to save money. It wasn't any of those reasons. It was simply because they had a project manager that didn't have any projects to work on, and had they not embraced an environmental agenda and had this guy plan and oversee a lighting retrofit, he would have had nothing to do and they would have had to lay him off.

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Posted by Mark Jewell