High Performance Portfolio Framework
What characterizes high performance in real estate? Which traits allow portfolios to excel in managing energy and adding value? Consider the following:
- Reducing energy consumption is viewed as a core business strategy.
- Transactions are made utilizing a full picture of the opportunities of energy efficiency:
- Life-cycle cost analysis informs decision-making.
- Costs and benefits are allocated among building owners and tenants.
- Energy building codes are viewed as the floor, not the ceiling.
- Staff are recognized and rewarded for meeting or exceeding energy goals.
- Marketing and leasing activities leverage energy efficiency to greater profits.
It's a comprehensive approach - involving the entire organization. It requires looking at your assumptions, and embracing change. But it doesn't have to be haphazard - and there are concrete steps to get you there:
Critically examine your business operations, and how decisions and everyday practices affect performance. Survey the links between energy and organizational success, and winning ways to manage both.
From the top down, think of energy management as an asset to leverage - an untapped business opportunity. Convince others, and set ambitious goals to improve performance.
Assemble the team. Benchmark the energy performance of your properties, looking to identify tenant needs, operational trends, and promising areas to focus on. Then build your strategy, mapping high-impact priorities against individual efforts.
Put the plan in motion. Adopt new construction design/build standards. Begin building tune-ups, and execute an enhanced operations and maintenance program. Start making purchases and awarding contracts with energy efficiency in mind.
Shift your thinking. Optimize the relationship between leases and energy, leverage tenant improvement projects, and establish performance incentives. Re-examine due diligence and building acquisition criteria, and close the loop between engineering and finance.
This is the good part. Negotiate from a position of strength, and capture additional value in market transactions. Build your brand, tracking and publicizing your successes. Reward the team, and develop an organizational radar to find the next big opportunity.