Vacant properties present an opportunity for smart enhancements that could fill the space faster and offer long-term value. Many landlords wait to make tenant improvements (TI) until a tenant signs a lease for a vacant space. But, commercial real estate is a competitive landscape, and rents have risen significantly in the past few years. Prospective tenants are seeking the most attractive environment possible for employee comfort and productivity, in addition to operational cost management. A quick-install wireless building automation system (BAS) offers a smart opportunity to differentiate property with value for owner and tenant alike.
Demand for Tech + Green
Tenants are usually more interested than property managers in building energy efficiency (especially when in a triple net lease), eco-friendly attributes and indoor environment quality. Property managers can secure a competitive advantage and attract high-quality tenants with modular building automation system installs. As prospective tenants increasingly adopt IoT-enabled smart devices, remote monitoring and predictive technology in their personal and home lives, they seek more sophisticated systems in their work environments. 75F even offers a user app, empowering individual occupants to tailor their zone to fit their personal temperature and lighting preferences.
Energy efficiency and other green building upgrades can help property managers attract tenants and fill a vacancy quicker. Consider retrofitting one vacant space at a time, which can be a quicker and cheaper way to add value to a space than when it is occupied.
75F's wireless, IoT-based building intelligence system can be installed 3 to 4 times quicker and much less costly than the typical energy management system (EMS) or smart-thermostat-based system.
Think of the your HVAC systems: rooftop units, air handling units, zone dampers, heat pumps and boilers. What if they were 30% to 50% more efficient while also delivering powerful remote monitoring insight that could further reduce operating costs and extend their lifetime. With energy costs typically around 30% of operating costs in most commercial buildings, this could drive down OpEx signifiantly.
Inefficient Buildings Default at Higher Rates. A study published in 2017 by researchers from the Lawrence Berkeley National Laboratory and the University of California, Berkeley, found that mortgage default rates of commercial buildings in six major metro areas were higher in buildings with higher energy consumption or energy costs from 2000 to 2012. Additionally, the higher the building's Energy Star score, the lower the likelihood of mortgage default.
Across the U.S., 25 of the largest cities and the state of California have passed energy disclosure requirements for commercial buildings. Energy disclosure means sharing energy consumption and energy use intensity of properties, which can help tenants make more informed decisions on leases and could even impact mortgage interest rates, if further correlation can be proven between energy efficiency and mortgage default rates.
Vacancy Is an Opportune Time
A vacancy offers the opportunity to accomplish building automation projects, such as lighting and HVAC upgrades, without disturbing tenants. And, each of these provide selling points to prospective tenants who are looking for a greener office environment that can help to increase worker productivity while keeping operational costs down.
Vacant space offers the opportunity to quickly install and pilot new technology. Benchmarking of the current installed systems can be accomplished prior to installation, if you have a good method of collecting data. Correlating energy costs with amount of time lights are on and amount of time maintaining a certain temperature in the space may work for benchmarking.
Otherwise, 75F pilot programs collect 650 data points each minute and upload data to cloud-based, secure servers. Tests during the pilot include comfort, energy savings, system efficiency, air quality, weather forecasts and more. The more data we collect, the better the test of the 75F system compared to the benchmarks set by your current system will be.
And, you can even feed your showing schedule from a Google calendar to the 75F system to pre-condition the space around your prospective tenant visits, so they are comfortable in the space from the start.
How Will You Pay for a New Building Automation System?
Retrofitting one vacant space at a time in your building is a helpful way to manage costs. You'll find that the ROI on a 75F system will be achieved in 3 years or fewer in most applications. Additionally, you may consider using common area maintenance (CAM) funds or including the costs in a new tenant improvement package. Another reliable option is amortizing the cost of the new system and rolling the expense into the tenants' lease payments.
It will pay to consult your city, county, state and utility provider for green building retrofit financial incentives; 75F can help conduct a site survey and coordinate with utilities to facilitate this process. Most states and utilities offer incentives to help make buildings more energy efficient , with mutually-beneficial programs that equate to tax savings and rebates, depending on the efficiencies achieved through retrofits.
So, let's turn that vacant space into a smart and comfortable differentiator to attract and retain your new tenants, with value for all.