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Breaking down the bottom line

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The business case for energy efficiency in buildings

Energy efficiency is now a fundamental part of doing business in real estate and property management. If companies miss out, they risk falling behind in terms of market competitiveness. This City Energy Project resource provides a multidimensional, in-depth look at the business case for energy efficiency in buildings. It provides an overview of the basic financial arithmetic of energy savings, avoided operating costs, net income, and value, as well as a summary of case study data on what this arithmetic has meant to real projects and companies. The core of this report is the firsthand commentary of executives at three real estate companies—Jamestown LP, Physicians Realty Trust, and Praxia Partners—each at the leading edge of efficiency and sustainability in its respective subsector, and each with its own approach to the business case.

 

This report provides a multidimensional, in-depth look at the business case for energy efficiency in buildings. It provides an overview of the basic financial arithmetic of energy savings, avoided operating costs, net income, and value, as well as a summary of case study data on what this arithmetic has meant to real projects and companies. It discusses other market drivers for energy efficiency and sustainability, including the increasing importance of ESG principles and certification. It looks beyond the question of why to the more complicated issue of how—how to define and justify the business case for specific projects, buildings, and portfolios, and how to operationalize efficiency and energy management with budgeting, contracting, and staff operations.

 

The core of this report is the firsthand commentary of executives at three real estate companies, each at the leading edge of efficiency and sustainability in its respective subsector (high-profile commercial adaptive reuse, medical buildings, and multifamily residential), and each with its own approach to the business case.