CREJ - Multifamily Properties Quarterly - July 2015
F or every construction project with a shiny new LEED certification coming on line today, it seems like there are more than 100 buildings that are 20 years - old or older. These out-of-date buildings are a major contributor to the global carbon emission issue. Energy codes that feed building codes have stepped up significantly in the past half-century, however, much of the nation’s buildings are in place from before these codes were put into effect. Multifamily buildings built in the 1990s are almost 9 percent more efficient than buildings of the 1980s, 17 percent more efficient than those built in the 1970s and 1960s, and 23 percent more efficient than pre-1960 housing, according to a multifamily energy efficiency analysis from Matthew Brown and Mark Wolfe. And multifamily building requirements mirror what is happening with residential, office and retail. In communities like Boulder, building owners and operators are facing hard deadlines to comply with the new building codes for existing properties. If owners do not meet the new standards by 2020, they risk heavy fines and taxes. Although building codes eventually will bring commercial real estate owners and operators in line with current standards, landlords are leaving profits on the table by overlooking key benefits of updating inventories now. Making a property green lowers operating costs, which increases margins. This, in turn, provides an opportunity to attract better tenants. Owners and operators often eschew eco-friendly updates in existing inventories because they do not know the steps to take in order to make changes. Breaking it down into a few easy categories can put owners and operators on the path to a greener future. Lighting. Efficient lighting is at the top of the list when assessing a building for sustainability. Efficient lighting can save as much as 40 percent on energy costs, and light retrofits are often one of the least expensive fixes with the biggest returns. Light emitting diodes use one-tenth the electricity of older, less-efficient fixtures, which makes them the most effective at cutting down lighting expenses. There are also rebate programs, such as Design Lights Consortium, that will issue rebates with the installation, or retrofitting of energy-efficient LED light fixtures. Water. Water conservation is another source of potential energy savings in a commercial building. High-efficiency fixtures not only save water, but also save energy associated with delivering water. According to the Environmental Protection Agency, the standard water flow is 2.2 gallons per minute, but high-efficiency faucet fixtures can reduce the standard by 30 percent, to 1.5 gallons per minute. Code requires that toilets flush at 1.6 gallons per flush. Low-flow ratings start at about 1.3 gpf and drop from there. For extra water conservation efforts, builders might consider no-water urinals. Maintaining the building’s plumbing and fixtures, along with repairing leaks, is a simple solution that has a great return. Insulation. Although brick siding is trendy, brick has little-to-no insulation value. If the building does not have a reasonable R-value insulation level, the building owner and the tenant will have higher energy bills due to inefficient insulation, and it will not meet code in many places. Single-pane windows leak air like sieves, which especially is true in retail spaces that often have big glass plates to display wares. Commercial builders want to preserve the character of the building by leaving the existing windows, but there are plenty of window upgrades that owners can make to preserve the historic character of a structure, such as low-e films that significantly reduce the amount of the sun’s heat entering a building. Energy efficiency. Efficiency ratings are a best-case scenario in factory-perfect conditions, tracking how much of the heating or cooling produced actually reaches building occupants. But don’t forget, erstwhile efficiency ratings do not function anywhere near that level today. Be sure to check out old heating, ventilation and air conditioning systems, and find out the efficiency rating. HVAC systems rarely die, but by upgrading to a high-efficiency HVAC system proprietors will save the headaches of having to deal with multiple repairs, and the energy savings will positively affect the bottom line. Research shows that more efficient buildings have higher occupancy rates and higher asset value than traditional buildings. The most energy-efficient buildings are those that have earned EPA’s Energy Star rating and use 35 percent less energy than typical buildings. Energy efficiency is one of the most cost-effective and simple ways to cut energy use. Commercial real estate contributes 40 percent of the global carbon footprint, with the biggest offenders being antiquated, existing building inventory. Nevertheless, a few easy fixes – in categories such as lighting, water, insulation and energy-efficiency upgrades – not only save building owners money in the long run, but also go a long way toward protecting the planet and shrinking the overall carbon footprint. Studies show that green-certified properties sell faster and for more money. Even better, the profit margin gain is greater than the cost to achieve these changes.