A typical search for office space can require combing through hundreds of listings and running the numbers on rent, utility costs, insurance and building fees in an attempt to make an apples-to-apples comparison of different market options.
And then there are the less quantifiable aspects of the search: How do you factor in your personal experience of entering a building? How do you put a value on a gut feeling of whether the space feels healthy and productive, or fits your personality and lifestyle? Often — at least more than we tend to admit it — those less tangible and subjective factors determine whether we sign on the dotted line.
For a large commercial real estate tenant, this challenge is even more complex. In addition to budgets and other financial criteria to prioritize, many companies and organizations must factor in sustainability commitments, brands based on corporate social responsibility values and employees who will spend more than eight hours each day in the space they select — employees whom they want to retain and keep healthy, happy and productive. Not to mention factoring in the boards and shareholders to which many companies must answer.
If I’m in a high-performance building, I can see how much energy I save, but I can’t see how much productivity we’ve gained, how much we’ve reduced rates of absenteeism and what health benefits we’ve accrued.
"The majority of tenants have classified the fundamental challenge as this: If I’m in a high-performance building, I can see how much energy I save, but I can’t see how much productivity we’ve gained, how much we’ve reduced rates of absenteeism and what health benefits we’ve accrued," said Alexandra Harry, senior associate with the Institute for Market Transformation (IMT), an organization that works to improve the energy efficiency of buildings.
"Without a number to assign to this reduction in overhead costs, it is nearly impossible to accept higher rents in a 'green' building."
[Want to learn more about energy management and efficiency in commercial buildings? Don't miss VERGE 16 Sept. 19-22 in Santa Clara, California.]
Thus, although a space may feel right because of the enhanced work environment it would deliver — resulting in greater employee health, productivity, retention and attraction — the current challenge tenants face of making even basic estimates of the impact of these "soft benefits" means these benefits are most often not included in apples-to-apples assessments that tenants conduct.
In 2014 and 2015, RMI published a series of Deep Retrofit Value Guides for commercial building owners and occupants and real estate investors. RMI developed these to provide real estate decision makers a comprehensive methodology to make the full suite of benefits that energy-efficient buildings deliver beyond energy cost savings more tangible by tying them to dollar values and real estate metrics.
These guides show that a sustainable office space can save about $6.