by Tesh Patel

In today’s real estate market, energy efficiency has moved from a nice-to-have to a business imperative. For owners, investors, and tenants of commercial real estate (CRE), cutting energy costs isn’t just about saving money. It’s about enhancing asset value, meeting regulatory requirements, reducing environmental impact, and attracting sustainability-conscious tenants.

Why Energy Savings Matter in CRE

Energy accounts for roughly one-third of a commercial building’s operating costs. Efficiency improvements directly lower utility bills and increase net operating income (NOI). Buildings with strong energy performance also often command higher sale prices and rental rates. Certifications like LEED, ENERGY STAR, and BREEAM add market appeal.

Today, many cities and states enforce energy benchmarking, disclosure, and building performance standards, and efficient buildings are better positioned to meet these evolving regulations. Corporate tenants, in turn, increasingly demand green buildings to meet their own Environmental, Social, and Governance (ESG) goals, making energy a high-demand goal for many CRE owners and operators. You can offer “green leases” that include energy management provisions between landlords and tenants, aligning incentives for energy efficiency improvements.

How You Can Prioritize Your Building’s Energy Efficiency

Energy Audits and Benchmarking

Developers increasingly aim for net-zero energy use, generating as much energy as they consume over a year. Before making improvements, assess how a building currently performs. Tools like ENERGY STAR Portfolio Manager help benchmark performance against similar buildings, identifying inefficiencies and opportunities. Improving energy efficiency can lower operating costs and attract high-value tenants, whether aiming for net-zero or simply an energy reduction. Energy audits and benchmarking can help you reach those goals.

HVAC Optimization

Heating, ventilation, and air conditioning (HVAC) systems are among the largest energy users in commercial buildings. Simple monitoring and optimization of your HVAC systems can save more than you think. Through our IntelliNet Optimize managed service, we identified how a simple change in compressor sequencing could save one customer $14,000 a year.

You can optimize your HVAC systems by installing smart thermostats and sensors, switching to high-efficiency HVAC units, and performing regular maintenance to ensure peak performance. Improving insulation, upgrading windows, and sealing air leaks also help regulate indoor temperature and reduce HVAC loads.

Lighting Upgrades

Replacing traditional lighting with LED fixtures can reduce lighting energy significantly, as LEDs use up to 90% less energy and last up to 25% longer. Integrating occupancy sensors and daylight harvesting further enhances savings.

Building Automation Systems (BAS)

BAS technology allows centralized control of HVAC, lighting, and other systems. By adjusting systems based on occupancy and use in real time, BAS reduces energy waste and improves comfort. We found that improving comfort settings for one customer could save them $1,000 a year.

Renewable Energy Integration

Renewable energy integration is becoming increasingly popular as the shift from fossil fuels to all-electric systems gains momentum (especially in jurisdictions with carbon caps). Solar panels, solar thermal systems, and wind power can offset electricity use. Power purchase agreements (PPAs) and on-site installations are also becoming viable for commercial properties.

AI and Predictive Analytics

AI and predictive analytics are transforming how commercial buildings manage energy use, offering smarter, more efficient ways to reduce waste, cut costs, and extend the life of building systems. Building operators can these tools to enable real-time, data-driven energy management, which can optimize equipment performance, predict faults weeks in advance, and assist with lifecycle management.

Financial Incentives and ROI

Investing in energy efficiency often delivers attractive returns. Key financial benefits include:

• Utility Rebates: Local utilities often offer rebates for efficient equipment and upgrades.
• Tax Incentives: Programs like the federal 179D deduction offer tax breaks for energy-efficient commercial buildings.
• Increased NOI: Reduced operating expenses raise profitability and property valuation.
• Faster Lease-Up and Retention: Energy-efficient buildings are more attractive to tenants, reducing vacancy and turnover costs.

Case Studies

Check out some of our case studies related to energy efficiency:

1. Duke Energy Center: Using control systems integration to optimize building performance led to a 20-25% energy reduction.
2. WarnerMedia Hudson Yards: Developing a strategy to manage building energy use more effectively led to a 20-25% energy reduction.
3. GSA 1800F: Defining building technology requirements and integrating all building systems into a unifying platform reduced energy use intensity by 50%.

Conclusion

As energy costs and environmental regulations continue to evolve, energy-efficient commercial buildings will not just be preferred, they will be essential. Energy savings offer far more than just cost reductions; they represent a strategic advantage in a competitive, sustainability-driven market.

With the right strategies and investments, property owners can enhance value, meet regulatory expectations, and contribute meaningfully to climate goals.