October 2016 — Property Management Quarterly —
Page 19
Babcock said. It was recommended
that buildings over 25,000 sf within
the city and county benchmark the
energy used on an annual basis
using the free Energy Star portfo-
lio management tool. This task is
predicted to takes a few hours of
staff time annually and a little more
time upfront to set up an account,
she said.
Every building’s score would be
shared with the city and made
publically available. “The goal is for
that information to be injected into
the market, so there can be greater
value or greater emphasis placed on
energy efficiency,” she said.
If the building receives a score
of 75 of higher, they’ve met the
requirements – performing in the
top quartile of buildings nation-
ally – and are exempt from doing
anything further. Of the commer-
cial properties the program would
impact, 81 were Energy Star certi-
fied (a score of 75 or higher) in 2015.
There have been 148 buildings ever
Energy Star certified in Denver, said
Babcock.
If the property has not met
the score requirement, it will be
required to pursue one of three dif-
ferent pathways in order to improve
the building. One pathway is the
performance-based option, which
requires improving the energy used
per sf by 15 percent over a five-
year period. The second pathway
involves a retro-commissioning
study. The building would be
required to implement anything
recommended in the study with a
2½-year payback or less. The third
pathway is an audit, with the same
mandate for any uncovered oppor-
tunities that offer a payback within
the same 2½-year or less timeframe.
The projects focus on quick pay-
back items that typically are lower
in costs and offer a 40 percent
return on investment, Babcock said.
She calls these types of energy-effi-
ciency projects “low-hanging fruit
that grows back.” The larger capital
investment projects and big-cost
renovations are never necessarily
going to be required through Ener-
gize Denver, she said.
The exact timeframe is still unde-
termined as the mayor’s office
reviews the recommendations and
determines priorities. But as it cur-
rently stands with the task force
recommendations, single buildings
over 50,000 sf would be required
to begin reporting in 2017. Build-
ings 25,000 sf or larger would be
required to start reporting in 2018,
said Babcock.
The performer improvement
deadlines will be randomly assigned
to different compliant tiers, with
the first group’s deadline in 2021.
Association Objections
“As we see values increase, taxes
increase and bond initiatives pass,
it continues to increase that burden
on commercial property owners,”
Simpson said. “While we’re all in
favor of funding schools and in favor
of affordable housing, we have to be
cognizant of the fact that our ten-
ants are paying those tax bills and it
has real impacts to their businesses
and their bottom lines.”
While all these examples relate to
Denver properties, Jackson argues
that rising costs impact managers
outside of Denver as well. “The point
is, whether or not someone manages
in the city and county of Denver, he
or she needs to be watching these
things because they could happen in
other cities,” she said.
If the city is interested in incen-
tivizing owners to reduce energy
consumption, there should be
some incentive, in terms of a tax
credit or something else, for own-
ers who invest the necessary capital
improvements to reduce energy con-
sumption, Simpson said.
Both associations said they recog-
nize the benefits of benchmarking
properties and don’t object to that
component. What upsets many are
the required upgrades.
“We don’t like that it’s being man-
dated,” said Jackson. “Those of us in
the real estate industry fully support
energy-efficiency upgrades and we
do what we can with our clients’
properties.”
CBRE wrote a letter of support of
Energize Denver, which stated the
property management firm already
does all of the proposed require-
ments as standards across its
buildings.
s
Management
Get involved.
Associations like
BOMA and IREM offer many ave-
nues to get involved. By educat-
ing yourself, you can keep your
clients fully informed on things
that impact them, said Dan Simp-
son, Metro Denver BOMA board
of directors. “By plugging in and
serving on committees, you have
an opportunity to see firsthand
those things that impact you as a
manager,” he said.
Take it one step further and be
vocal. “Be willing to be a voice,
because they want to hear from
the end user,” said Tiffany Jackson,
with IREM Greater Denver Chapter
17.
Work with tenants.
As you work
on next year’s budgets, you must
decide how to handle the expect-
ed tax increases. Managers can
opt to have a conversation with
the tenant now, at the end of 2016,
or wait until they need to collect
more taxes at the end of 2017,
when everything is known, said
Matthew Poling with Ryan.
“I think it’s best to head it off
upfront and let people know
what’s coming, rather than wait-
ing until the end of the period
and trying to collect additional tax
money from the tenants,” he said.
Get a jump-start on benchmark-
ing.
Many large buildings already
benchmark energy use. But for
those that haven’t yet, the Ener-
gize Denver team offers a free
voluntary program to support
building owners on how to use
the Energy Star tool. Materials and
training are available on the web-
site as well.
Get a jump-start on energy
improvements.
There are programs
already available through Xcel
Energy that offer incentives and
rebates to do retro-commissioning
studies, audits or other kinds of
upgrades. Information is available
on the Energize Denver website.
