Written by: Carly Burke
Have you ever been asked to benchmark a multifamily property? Did you throw your hands up and want to give up? If the answer is yes, this is for you.
Energy benchmarking is a measurement used by building owners, managers, and investors to determine how a building’s energy performance compares to similar buildings. If you can measure it, you can control it. If you can control it, you can manage it.
Benchmarking Multifamily Properties
After the Great Recession in 2008, commercial real estate (CRE) investors diversified their portfolios to include multifamily. This trend is expected to continue given that many of us are now working from home (read more about it in our 2020 ACEEE Summer Study published here). Although multifamily properties are a prime target for energy benchmarking, accessing whole-building energy data is a consistent and frustrating barrier – ultimately limiting investments in energy efficiency and sustainability across the sector. In order to benchmark a building's energy use, an understanding of the entire building's energy usage is needed, specifically, owner-paid and tenant-paid energy meters. With all these factors in mind, energy data access is a critical issue to overcome.
Why benchmark multifamily properties?
It offers a relative understanding of energy consumption, making it easier to identify opportunities for energy reductions.
High performance buildings optimize for energy savings, tenant productivity, cost-benefit, and operations.
These optimizations lower utility costs for tenants, increase the building’s asset value, and enhance operational reliability.
Why does it matter?
Understanding a building’s energy performance, decision-makers lack the financial business case needed to decide on energy efficiency investments. This knowledge gap leads to missed opportunities that increase building asset values, decrease operational costs and undervalued appraisals.
With the introduction of benchmarking ordinances across the U.S., municipal and commercial building owners have had to learn how to obtain whole-building energy data from utilities. Until recently, multifamily properties were left out of the equation – often seen as the elephant in the room despite the amount of low performing multifamily buildings in the U.S.
Challenges
Multifamily properties are typically individually metered, meaning residents pay their utility for the electricity that they consume.
Customer privacy policies limit what data utilities can share with building owners, meaning they often cannot provide energy data for individual residential units without customer authorization.
Given the time and effort required to obtain these authorizations, building owners often ignore tenant energy data and focus on common area energy usage, which they pay for and can access.
So, what’s the solution?
Aggregate, whole-building energy data is the golden ticket to benchmarking multifamily properties, which some utilities have begun offering. This type of data protects tenant privacy by stripping the data of identifying customer information. Obtaining accurate and complete energy data is an integral component of the benchmarking process. However, it can be challenging to understand what information is needed and how to request data from the energy provider.
When reaching out to a utility, we recommend the following steps:
Research if the utility offers benchmarking as a service
If so, compile the property information needed and submit your request
If not, reach out to the utility and state the purpose of the request (e.g. benchmarking ordinance compliance, interest in energy efficiency, etc.).
Include the property address, months requested (typically 24 months), and the type of property.
Confused or not sure how to proceed? Reach out to info@waypoint-energy.com and we’ll chat.