- Accounting for an average 30% of owner’s and tenant’s operating expenses, energy is the single largest non-salary related item and 30% of consumed energy is typically wasted.
- The greatest impediment to going forward with energy efficiency upgrades is the associated cost and the impact on cash flow.
» Options are now available to eliminate the cost barrier. A new and innovative financing option is Property Assessed Clean Energy (PACE) which property owners love. They can fund projects with no out-of-pocket costs since PACE loans provide 100%, no money down, financing.
» Repaid with a voluntary, special property tax assessment, PACE financing terms are for 20 years or more. It’s possible to undertake comprehensive energy efficiency and water conservation retrofits that result in meaningful energy and water savings, significantly impacting bottom line profitability.
» Because the property secures the loan, PACE is non-recourse. And because a PACE loan is a tax, it can be considered-off-balance sheet, preserving the owner’s borrowing capacity for other projects.
» PACE projects are especially attractive to owners and property managers of commercial real estate. Lower operating expenses drive NOI’s which directly impact property values.
» Most energy efficiency upgrades include the heating, ventilating and air conditioning (HVAC) system as well as lighting. Both are major contributors to building occupant comfort. For leased space, the increased occupant comfort typically commands higher lease rates – on average 3 to 5 percent. Plus a more comfortable environment helps tenant acquisition and retention increasing occupancy rates.
- These upgrades enable building owners to be good environmental stewards: offering a “greener” and more sustainable building can make a valuable contribution to an organization’s brand equity.