The Tenant Energy Optimization process offers proven, measured financial and environmental benefits—to the stakeholders involved in its implementation, and to the planet.
It generates an attractive return on investment (ROI). Tenants using the step-by-step design and construction process typically have experienced:
- Energy savings of 30 to 50 percent
- Payback in as little as three to five years
- An average annual internal rate of return (IRR) of 25 percent
It provides a competitive edge. Companies with more sustainable, energy-efficient workplaces enhance their ability to attract, retain, and motivate workers who are healthier, happier, and more productive.
It is scalable and replicable. The process can provide energy and financial savings whether the tenant leases 2,500 or 250,000 square feet. Tenants and service providers who have gained expertise through implementation of the process have demonstrated that a high potential exists for transferability beyond tenant office space to other property sectors.
It is proven. Through measurement and verification, tenants are able to demonstrate and communicate energy and financial savings.
It is environmentally critical. Energy use in buildings is the largest source of climate-changing carbon pollution, and tenant spaces generally account for more than half a building’s total energy consumption, making this process essential to improving the environmental performance of buildings and addressing global climate change.
Benefits to Stakeholders
Leasing brokers are influential tenant advisers during the pre-lease phase. If experienced in energy efficiency conversations, brokers can help tenants demand and understand building energy performance information during the site-selection process. Brokers who highlight case studies or examples of work representing tenants in the selection of high-performance spaces may gain additional clients.
Tenants create demand for energy-efficient, high-performing space. Tenants also create demand for consultants who can advise them on how to reach their sustainability goals through the design and construction of energy-efficient space. By prioritizing energy-efficient space and working closely with their advisers, tenants can develop better workplaces that attain recognition for sustainability leadership, as well as manage costs.
Building owners supply high-performance buildings that help tenants meet their energy performance and financial goals. Real estate owners can gain competitive advantages by marketing energy-efficient buildings’ cost-saving energy and operations improvements to attract high-quality, sophisticated tenants. Tenants may prefer longer lease periods in highly efficient buildings that better align with their corporate environmental and social responsibility goals, provide financial benefits, and add recognition value.
Consultants (e.g., architects, engineers, project managers, energy consultants, and contractors) provide the expertise to optimize energy performance and present the technical options and economic case for a comprehensive, cost-effective, and high-performance space. Consultants offering these services may attract additional clients by demonstrating cost savings and other benefits to tenant’s business goals.
When implemented in ten pilot fit-out projects, the Tenant Energy Optimization process yielded impressive energy and cost savings:
|Company||Leased area (SF)||Added cost ($/SF)||Energy reduction||Total savings||ROI||Payback
|Coty Inc.||80,000||$0.71||30.7%||$716,148||328%||2.7 years|
|Cushman & Wakefield||7,500||$3.25||47.5%||$87,862||359%||1.7 years|
|Estee Lauder Companies||10,000||$1.29||12.1%||$15,862||42%||3.7 years|
|Global Brands Group||137,000||$0.98||11.8%||$438,090||126%||4.6 years|
|LinkedIn Corp.||36,000||$2.63||31.3%||$153,000||23%||6.4 years|
|Reed Smith||117,000||$1.31||44.5%||$1,126,498||410%||2.2 years|
|TPG Architecture||40,000||$2.01||21.6%||$275,372||162%||3.2 years|