Three tips for increasing tenant engagement around energy
Building occupants directly and indirectly control a significant portion of a facility’s energy use. Positive engagement with building tenants is smart energy management, to be sure—but it’s also a sound business strategy.
Here are three of the biggest reasons to hop on the tenant engagement bandwagon relative to your building’s energy use, along with three ways to get started today.
1. Tenants consume a lot of energy—give them the visibility they need to reduce costs.
No matter what sort of hyper-efficient equipment you’ve got running your building, you’re at the mercy of your tenants for a significant component of your energy bill, making it important to emphasize tenant education and behavior change strategies.
Countless studies have shown that engaging tenants in energy efforts can have a big payoff for landlords and property managers of multi-tenant buildings, such as one report from the EPAthat says plug loads can exceed 30% of the total bill for commercial properties.
The share of costs resulting from tenants is rising, too. The Department of Energy estimates that those plug load demands I just mentioned are increasing twice as fast as overall energy usage in commercial buildings. And that’s just plug load—consider the impact when you factor in lighting, HVAC, refrigeration equipment, and other loads.
Reducing tenant energy use can also have a big impact on the energy performance and costs of the building as a whole. As firms like Vornado Realty Trust and Brandywine Realty Trust have found, according to the EPA, providing tenants with visibility into their energy costs can lead to cost reductions for tenants and improved ENERGY STAR scores for the property overall.
Vornado earned ENERGY STAR Certification for a New York City property in 2008, but was able to further increase the property’s score from 80 that first year to 88 in 2012 by engaging tenants and providing visibility into their consumption through online tools like Vornado’s Energy Information Portal.
2. Happy tenants stay put, so show them you care.
Retention rates for tenants have an enormous impact on the profitability of a commercial property As Jones Lang LaSalle found in its study “The Cost of Losing a Tenant,” it can take up to two years to regain lost income from a single tenant leaving a property.
Providing tenants with visibility into their energy use, through tools like energy intelligence software and engagement platforms like WeSpire, can drive higher engagement and satisfaction with the property team.
Beacon Capital Partners’ Managing Director Al Scaramelli demonstrated this by running a four-tenant competition within the firm’s Boston flagship property at One Beacon Street, using a “car race” status board in the lobby to track tenants’ performance against baseline consumption patterns. The winning tenant, Environmental Resources Management (ERM), found the competition helped them reduce operating expenses and engage their own employees—and strengthened the tenant’s relationship with their landlord.
3. You’ll need to engage tenants to comply with the law—so help them win recognition in the process.
Building owners and property managers responsible for complying with local energy disclosure regulations and benchmarking through ENERGY STAR Portfolio Manager know that obtaining energy data from tenants can be a challenge, especially when tenants pay for utilities directly. Tenants who engage with energy management practices at the property are more likely to make the effort to help the property team assemble the data they need to comply.
To help incentivize tenants to be more involved in energy management, property teams can leverage opportunities to help their tenants achieve recognition for their energy efforts with the new Tenant Star program recently signed into law as part of the Energy-Efficiency Improvement Act of 2015.
In closing, the old chestnut that “knowledge is power” is key to lowering energy costs in a multi-tenant building. Engaging with tenants about the value of energy management and arming them with the tools and know-how to lower costs results in more strategic energy use that benefits both building owners and occupants.