US building owners are scaling back the pace of energy-efficiency upgrades, according to the latest Global Sustainability Perspective report from Jones Lang LaSalle.
Seventy-eight percent of building owners plan to perform sustainability improvements over the next two years, compared to 91 percent that said they spent money on upgrades over the past two years, the financial services firm says.
In Building Energy Retrofit – Owners Need Convincing, Not Just Financing, the firm says the decline in sustainable retrofits isn’t connected to a lack of financing. In most cases, JLL says the biggest obstacle is proving that the investment will increase the bottom line.
The report says more capital is available for energy retrofits and renewable energy installations today than in recent years, but most owners have avoided financing options, focusing on self-financed projects that can demonstrate a direct financial payback.
Owners favor less expensive projects such as lighting retrofits and temperature controls, rather than HVAC upgrades that would save more energy but be less visible to tenants, says Dan Probst, chairman of energy and sustainability services at Jones Lang LaSalle.
Owners do not expect energy improvements to result in higher rent, but they do expect to attract more tenants, thus improving return on investment and building value.
While owners have focused primarily on moderate-cost improvements, those that analyze the cost and financial payback of a whole-building energy retrofit — and can take advantage of tax incentives — may find more extensive retrofits make financial sense as well, JLL says.
And there is increasing evidence that sustainability and energy-efficiency programs are good for business, according to the firm.
As certification systems such as LEED or BREEAM have defined what sustainable features are most effective, they’ve also redefined what constitutes a Grade A in the larger real estate investment markets, writes Franz Jenowein, director of energy and sustainability services, in the report’s lead editorial.
Benchmarking tools at enterprise levels have emerged as sustainable building investments rise, it says. These tools help track property companies’ sustainability initiatives and progress in achieving “green” goals.
A Jones Lang LaSalle study published last month said cities that invest in smart-grid technology and infrastructure, called “connected cities,” experience an annual GDP growth rate that is 0.7 percent higher, an unemployment rate that is a full percentage point lower, and office occupancy rates 2.5 percent higher than less advanced cities, Energy Manager Today reports.