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Worried about the Downward-Trending CRE Cycle’s Impact on Energy Efficiency?

Written by: Marta Schantz

Lately, a number of commercial real estate (CRE) experts have been warning about the potential of an impending market downturn in the real estate asset cycle. While 2015 experienced continued growth and rising property values for the CRE market, 2016 is full of uncertainty and hesitation. For example:

Few investors have confidence the current market is sustainable and are asking themselves, “What is an investor to do?” Globe St, May 11, 2016
Industry pros expect continued improvement in the office sector. But a closer look reveals that bullishness is starting to weaken. The latest cycle may have reached its peak, with an increasing number of insiders expecting momentum in fundamentals to stop or begin to reverse in the next 12 months. NREI, May 10, 2016

What such experts may not be realizing, though, is the huge opportunity that this presents for the energy efficiency sector. Consider this – when absorption is stagnant and vacancy is up, what are we missing? Money. And where can we save money? On properties’ utility and repairs & maintenance (R&M) budgets.

Waypoint is in a special position to help the CRE market stay strong, no matter the state of the cycle, because saving money (and energy) is in our DNA.  And not only does energy efficiency help a building directly save money, it also adds a number of qualitative value prospects to a property. The competitive advantages an energy-efficient (green, LEED, ENERGY STAR, etc.) building has over its peers are numerous; not only does the space often feel more comfortable and modern, it also correlates with increased occupancy, rental rates, and asset value.

Because Waypoint speaks the both the CRE language and the energy language, we are able to bridge the frequent communication gap between the financial decision makers of a property and its facility engineers on the ground and at their utility. By crafting tailored business cases for specific energy conservation measures with stats such as return on investment (ROI) and payback period, and pulling in utility incentive funding to offset some or all of the costs, Waypoint succeeds in turning these project ideas into a realty.

So the next time you hear about the downward CRE economic outlook as an excuse for not investing in energy efficiency… remember that they’ve got it backwards: energy efficiency is the reason to invest!


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