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Real Estate Journal — Fall Preview — September 30 - October 13, 2016 — 9C
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By Chuck Hurchalla, Evolution Energy Partners Protect your profit margins
I
f you own or manage prop- erties, you already know how costly it is to run a
can or should you implement? The aforementioned hotel implemented an LED lighting
tion, exhaust controls, energy management systems, chiller upgrades, and more. There
and mechanical systems. This helps determine long payback measures and allows you to reduce the scope to include only the most cost effective solutions. What if you do not have the in-house expertise necessary to analyze and develop such solu- tions? Consider consulting an experienced energy engineer- ing and services company to help reduce your energy costs. As withmost industries, differ- ent companies offer different depth and breadth of services, so it is usually best not to en- gage a typical contractor with
limited options or a sales rep- resentative that peddles only one energy efficiency product. Instead, look for a firm with the following attributes: ● A company that will do the upfront work at no cost and no obligation. This com- pany should provide you with an ASHRAE Level II report or better showing all recom- mended solutions and project economics in detail for free. It might narrow down the num- ber of companies you can work with but the best ones don’t ask you to spend a dime until continued on page 18C
building and how t ho s e costs eat into your profit marg ins i f they are not tightly man- aged. So which costs cause
“Preserving your profit margins will always be a struggle, but significantly reducing and controlling your second largest expense category goes a long way and can be made easier by choosing the right partner.”
upgrade, variable frequency drives on pump motors, and enhancements to their building automation system. Additional efficiency options could include free cooling, EC motors, CHP, demand controlled ventila-
are many proven, industry accepted energy conservation measures available. The key is to engineer and analyze all possible options specific to the particular building’s unique energy profile and electrical
Chuck Hurchalla
the biggest drain on your re- sources? It's no surprise that the largest expense comes from your fixed costs, but did you know, according to BOMA, utility expenses are the sec- ond largest expense category across all building types in the commercial sector? These expenses are also the easiest and most impactful to control and reduce when addressing both consumption (demand) and price (supply) together. For example, consider a high-rise building with 30,000 s/f of common area space con- ditioned and lit year round. The annual utility costs exceed $100,000 allocated approxi- mately 40% HVAC, 25% light- ing and 5% domestic hot water. Reducing the building’s fuel and electrical consumption by just 20% would provide more than $20,000 in savings. Now let’s revisit those profit margins your utility costs have been eating into every year. According 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 savings of $20,000 equates to more than $403,000 in newly generated revenue every year. Another example is a 500,000 s/f NYC hotel that reduced electric consumption and 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 (14-month payback). Additionally, the hotel was given the option to finance the entire project with zero upfront capital, either through traditional third-party financ- ing or utility on-bill financing. During the 60-month financ- ing term, the project savings outpace the monthly finance costs by almost $2,000 per month, generating more than $20,000 in immediate positive cash flow every year with zero upfront capital spent. What efficiency measures r more info, ontact: Chuck Hurchalla President (610) 329-8288 rchalla@evolutionep.com w.EvolutionEP. om @EvolutionEP
Combining Energy E ciency Financing with Energy Risk Management Combining Energy E ciency Financing with Energy Risk Management Combining Energy E ciency Financing with Energy Risk Management
Energy E ciency Upgrades - E ciency Upgrades reduce both annual consumption and total energy budget. - EEP will identify oppurtunities and develop projects such as lighting, HVAC Upgrades, Combined Heat & Power (CHP), and Solar. - No Upfront Capital Required : projects can often be nanced through grants, rebates, loans, or combined with energy supply contracts. Utility Data Analytics - Online Platform automatically tracks and analyzes utility consumption and bills. - Minimal sta involvement and no data entry. Proactive Procurement Strategies - Customized energy procurement strategies based on your energy objective, consumption pro le, & risk tolerance. Energy E ciency Upgrades - E ciency Upgr des reduce both annual consumption and total energy budget. - EEP will identify oppurtunities and develop projects such as lighting, HVAC Upgrades, Combined Heat & Pow r (CHP), and Solar. - No Upfront Capital Required : projects an often be nanced through grants, rebates, loans, or combined with energy supply contracts. Utility Data Analytics - Online Platform automatically tracks and analyzes utility consumption and bills. - Minimal sta involvement and no data entry. Proactive Procurement Strategies - Customized energy procurement strategies based on your energy objective, consumption pro le, & risk tolerance. For more info, Contact: Chuck Hurchalla President (610) 329-8288 churchalla@evolutionep.com Energy E ciency Upgrades - E ciency Upgrades reduce both annual consumption and total energy budget. - EEP will identify oppurtunities and develop projects such as lighting, HVAC Upgrades, Combined Heat & Power (CHP), and Solar. - No Upfront Capital Required : projects can often be nanced through grants, rebates, loans, or combined with energy supply contracts. Utility Data Analytics - Online Platform automatically tracks and analyzes utility consumption and bills. - Minimal sta involvement and no data entry. Proactive Procurement Strategies - Customized energy procurement strategies based o your energy objective, consumption pro le, & risk tolerance. - Mitigate risks & manage costs for power, gas, propane and oil. - Transparent RFPs with fees much lower than other brokers. For more info, Contact: Chuck Hurchalla President (610) 329-8288 churchalla@evolutionep.com w .EvolutionEP.com @EvolutionEP - Mitigate risks & manage costs for power, gas, propane and oil. - Transparent RFPs with fees much lower than other brokers. For more info, Contact: Chuck Hurchalla President (610) 329-8288 churchalla@evolutionep.com www.EvolutionEP.com @EvolutionEP - Mitigate risks & manage costs for power, gas, propane and oil. - Transparent RFPs with fees much lower than other brokers. Combini Finan Risk Ener - E ci - EEP Upgr - No U grant
Utilit - Onlin - Mini Proa - C st cons
For more info, Contact: Chuck Hurchalla President (610) 329-8288 churchalla@evolutionep.com
Energy E ciency Upgrades - E ciency Upgrades reduce both annual consum - EEP will identify oppurtunities and develop proje Upgrades, Combined Heat & Power (CHP), and S - No Upfront Capital Required : projects can ofte grants, rebates, loans, or combined with energy Utility Data Analytics - Online Platform automatically tracks and analyze - Minimal sta involvement and no data entry. - Mitig - Trans www.Evol ionEP.com @EvolutionEP
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