It is often said that “what gets measured is what gets done.” Surely it’s good to talk seriously about a triple-bottom line, but if there’s no useful metric for measuring those other goals, then everything remains subject only to the traditional bottom line.
LEED certification and other green building rating systems were designed to create a useful metric that could generate an environmental bottom line, for individual projects and across a portfolio. In that respect, these rating systems have undeniably transformed the real estate market and set meaningful benchmarks against which the real estate industry can measure improvements. These green building benchmarks are intentionally holistic and prioritize design and construction over ongoing operations.
Energy benchmarking is a data-driven process by which building owners can measure and assess the performance of individual buildings over time. Although this process is valuable purely as an internal research effort, it is exponentially more valuable when building owners aggregate and share this data. As a result, many owners are voluntarily benchmarking their own buildings, and local jurisdictions are increasingly requiring both benchmarking and public disclosure.
According to the Institute for Market Transformation (IMT), as of August 2014 at least ten major cities and two states had energy benchmarking and disclosure laws in place that apply to privately-owned commercial properties, usually above a certain size (10,000-50,000sf). As one example, in Year 2 of Philadelphia’s energy benchmarking and disclosure program, 1,900 buildings representing 270 million square feet of commercial space and 25% of the City’s total building stock provided energy data.
It is critical for MSRED graduates to understand the basics of real estate development; but it is also critical that they are successful over time. Energy data collection and benchmarking is a skill that has a measurable bottom line and yet is also not well-understood by many developers or building owners today. Real estate professionals who do understand energy benchmarking and its potential to help finance capital investments will be much in demand nationwide for years to come.
This MSRED Update has other information about our current program and the people making it happen. Additionally, we are launching a Real Estate Summer Minor Institute for Tulane undergraduates. I encourage you to read about these and other successes, and see how MSRED students are continually improving their bottom lines.