SIZE: 1,818,000 SF
TYPE: Portfolio (Multi-Use)
Portfolio Energy Analysis
Strategy & Services: It was the push by a property manager to do better that instigated stok’s first ever Colorado project. Despite a relatively strict regulatory environment in Boulder where certified B Corporation Conscience Bay Company is based and manages assets (as well as Denver), it was the internal leadership of CBC that sought to achieve greater transparency in the energy performance of their real estate portfolio. This motivation led to two packages of services by stok: 1) a broad effort to disaggregate tenant energy usage data across all properties in CBC’s portfolio and 2) a deep dive into one building group to not only assess energy usage by tenant, but to also compare proposed utility cost savings against actual cost savings of energy efficiency building upgrades completed the year prior.
Design Details: Throughout this process, a number of challenges emerged. Not only were some building systems not set up to be disaggregated (i.e. a roof unit that linked into multiple tenants), but some of the data from the utility itself was incomplete. Engaging all stakeholders in the process, stok creatively filled the gaps to provide a comprehensive and detailed analysis that ultimately uncovered hundreds of thousands of dollars in value for the client if they were to continue implementing similar energy efficiency measures throughout their portfolio.
“Engaging all stakeholders in the process, stok creatively filled the gaps to provide a comprehensive and detailed analysis that ultimately uncovered hundreds of thousands of dollars in value for the client if they were to continue implementing similar energy efficiency measures throughout their portfolio.”
Outcome: While the energy conservation measures analyzed by the stok team led to ~15% reduction in utility cost and a potential of >2,000 MT CO2e of reduced greenhouse gas emissions per year for the portfolio, these were not the only impacts. Another major outcome of this project came from the innovative financing model developed to implement the recommendations of the portfolio energy analysis. The former capital cost recovery system relied on charging tenants CAM (Common Area Maintenance) at a specified interest rate over 10 years to cover the costs of the upgrades. In contrast, the new concept has the property owner solely invest in the improvements and does not pass expenses through to the tenant. Alternatively, in the split savings system, CBC would receive an agreed percentage of the utility savings from energy efficiency upgrades while tenants receive the remainder of those savings on a monthly or annual basis. This alternative structure leads to an increase in combined NPV of nearly 500% between both owners and tenants when analyzed for a single property as it creates continuous cash flow for the owner, increases NOI, and creates added asset value on a NNN lease!
*Impacts based on projected outcomes of ongoing energy performance improvements throughout entire portfolio.