Andrew Jubelt and the Value of Energy Retrofits
Mr. Julbelt understands that the financial cost reductions associated
with superefficient buildings — making the pursuing of energy retrofits by
owners and investors the wave of the future.
Consider this: buildings in the U.S. consume a lot of
energy. In fact, they use 42 percent of the nation’s primary energy and 72
percent of its electricity. Unfortunately, much of that energy is needlessly
wasted through inefficient design and operation.
The following are the reasons why commercial real estate
professionals such as Mr. Julbelt are recommending superefficient building
retrofitting:
- Energy retrofitting can reduce
a buildings’ energy consumption by 54–69 percent over business-as-usual
projections through 2050. As a result, absolute energy consumption in 2050
that would be 40–60 percent less than in 2010, despite a 70-percent bigger
building stock.
- A joint Rockefeller
Foundation / Deutsche Bank Group 2012 study found energy savings worth
four times their cost in ten-year time frame. An investment of $279
billion could yield more than $1 trillion in energy cost savings.
- Numerous studies and
surveys note that, compared to market averages, energy-efficient green
buildings boast reduced absenteeism, better employee health, higher
occupancy rates, increased rental rates and sales prices, and decreased
financial and regulatory risk.
- A growing body of statistical evidence suggests that green office buildings can command rent premiums of 3–6 percent and sales price premiums of 10 percent or more.
A focus exclusively on saved energy costs overlooks other
important values, known as “value beyond energy cost savings” (or VBECS). For
example, risk is one of the most important factors in any deep energy retrofit
capital decision and has a direct tie to VBECS. Risk is not just a soft,
indirect, or non-financial consideration, but one of the most important value
elements in a deep energy retrofit investment. For example, an annual $1,000
retrofit cash flow benefit with a five percent return requirement would be
valued at $20,000, approximately 100 percent higher than the same $1,000 cash flow
benefit valued assuming a 10 percent return requirement.
Sustainability and energy efficiency have become central
concerns to regulators, employees, customers, clients, boards, and other
stakeholders. Maximizing recognition of value by all stakeholders requires
understanding what aspects of sustainable value are most critical to different
stakeholder groups and clearly communicating these values. Andrew Julbelt
understands this. Please contact Andrew
Jubelt at (212) 231-9779 for more information about how energy and
sustainability improvements add value to a commercial property.
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