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Real Estate Journal — Spring Preview —April 28 - May 11, 2017 — 5C
M id A tlantic
E ngineering
By Chuck Hurchalla, Evolution Energy Partners Protect your profit margins
C
You may want to consider engaging an experienced En- ergy Engineering Firm to lend
a company that will provide you with a free ASHRAE Level II report showing all recom- mended solutions and project economics in detail. The best companies don’t ask you to spend a dime until you have all of the information necessary to make an informed decision. • A company with experts on staff with comprehensive experience in all of the dozens of available energy efficiency measures out there. You never know which measures will be best for your building until the analysis is done. • A company that will both
administer the utility rebate process and accept the incen- tives directly as partial pay- ment for the project. • A company that will per- form the installation of their solutions on a complete design/ build, turnkey basis. Preserving your profit mar- gins will always be a struggle but significantly reducing and controlling your second largest expense category can be easy and it is a sure way to help win the fight. Chuck Hurchalla is presi- dent of Evolution Energy Partners. n
ontrolling costs while maintaining tenant and occupant comfort
options specific to the particu- lar building’s unique energy profile and electrical and me-
i s impe ra - tive to pre- serving profit margins. But which costs c a u s e t h e biggest drain on your re- sources and whi ch are the easiest to control and re- duce? It’s no surprise that the larg- est expense comes from your fixed costs but did you know that utility expenses are the second largest expense cat- egory across all building types in the commercial sector? Fur- ther, would you be surprised to learn that those expenses are also the easiest to control and reduce? As a simple scenario, con- sider a high-rise building with 30,000 s/f of common area space conditioned and lit year round. The annual utility costs amount to more than $100,000 allocated approximately 40% for HVAC, 25% for lighting and 5% for domestic hot water. If we were to reduce the build- ing’s consumption by just 20% we would realize more than a $20,000 expense reduction. Ac- cording to NYU’s Stern School of Business, the average net income based profit margin for Real Estate Operations & Services is 4.96%. That means that the bottom line annual savings of $20,000 equates to more than $403,000 in newly generated revenue every year. And it’s not just offices or res- idential buildings. A 500,000 s/f city hotel built just a few years ago recently reduced their electric consumption and corresponding cost by more than $65,000 per year. The project garnered over $160,000 in utility rebates and federal tax benefits and has an 86% ROI (pays back in just 14 months). Additionally, the ho- tel had the option to finance the entire project with zero upfront capital, where the project was able to self-fund and generate more than $20,000 in immedi- ate positive cash flow every year during the financing term. So how does a company realize savings and returns like this? From a technical perspective, there are many potential energy conserva- tion measures available. The trick is to analyze all possible Chuck Hurchalla
Preserving your profit margins will always be a struggle but significantly reducing and controlling your second largest expense category can be easy and it is a sure way to help win the fight.
a hand. Look for a firmwith the following attributes: • A company that will do the upfront work at no cost and no obligation. Make sure to find
chanical systems. Then you can weed out the long payback measures and reduce scope to include only the solutions with the greatest cost benefit.
Combining Turnkey Energy E ciency with Project Financing and Energy Risk Management
No Contract Required
Fully Transparent Fee Structure
Free Access to Utility Bill Auditing & Management Software Energy E ciency Audits Provided at No Cost
Project Financing Options - No Up-Front Capital Required Free LL84 Reporting as an EEP Customer
Contact Us:
Chuck Hurchalla (610) 329-8288 CHurchalla@EvolutionEP.com
Samantha Hall (484) 983-8873 SHall@EvolutionEP.com
www.EvolutionEP.com
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