- May 1, 2012: Vol. 6, Number 5

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Every Little Bit Counts: How Investors Should Think About Reducing Energy Consumption in their Multi-Tenant Office Assets

by Hugh Morgan and Walt Homan

Buildings consume a large amount of energy, and until recently real estate energy bills were viewed as an uncontrollable expense. New software and technology are changing this. Investors now realise that energy expenses can be reduced through any of five paths: capital investment (retrofits), utility incentives, open-market procurement, occupant behaviour change and operational improvement.

The last path — operating more efficiently — is the easiest and most cost-effective way of capturing savings as it does not necessitate major capital investments. It does require both senior management commitment and behaviour change at the operating level and is most effective with multi-tenant office properties where managers have the greatest influence over energy spending. Ongoing savings can amount to $0.10 to $0.25 per square foot (e0.80 to e2.00 per square metre) annually, often incrementally over several years. These savings can result in a 2 percent to 3 percent i

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