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International

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Commercial Buildings

How to Calculate and Present Deep Retrofit Value

Energy efficiency building retrofits in the United States and around the world are attractive investments, but receive far less attention and capital than they deserve. This is in part due to a narrow definition of their value, typically focused on energy cost savings alone, and in part due to confusion…

How to Calculate and Present Deep Retrofit Value (Executive Summary)

Energy efficiency building retrofits in the United States and around the world are attractive investments, but receive far less attention and capital than they deserve. This is in part due to a narrow definition of their value, typically focused on energy cost savings alone, and in part due to confusion…

It’s time that Class B and C office owners recognize the largely untapped business opportunity to improve the energy performance of their properties through energy efficiency and green leasing. Compared to business-as-usual operations, Class B/C properties could save roughly 15 percent of their energy costs with a bundle of low-to-no-cost measures, and 35 percent or more with larger investments. That can translate into net operating income increases of 2.4 percent to 5.6 percent, and property value increases of $5 to $11 per square foot (i.e., $343,000 to $800,000 for a 75,000 square foot building).

Even with these financial benefits, there’s a reason that the Class B/C office market hasn’t yet wholeheartedly adopted energy efficiency and green leasing into normal course business practices—it’s at a disadvantage compared to the Class A market. These properties are information constrained, resource constrained, and funding constrained.

The recommended low-cost, high-impact strategies and case studies in this report were developed based on primary and secondary research, including a series of in depth interviews with a wide range of Class B/C office professionals. They are intended to simplify and streamline energy efficiency and green leasing opportunities for Class B/C office owners and provide strategies that are appropriately tailored to the reality of the market, anchored around overcoming core barriers for Class B/C building owners.