by AF0105 e3 — January 8, 2010—Proven, existing efficiency technologies—in everything from lighting to climate control and more—can unlock the untapped reserves of efficiency gains buried in many real estate holdings, according to a new report.
Those gains would be a boon to real estate investors’ bottom lines both direct property owners like large pension funds and smaller investors who primarily hold real estate securities even as they make our buildings far less power-hungry and a big part of America’s efforts to combat climate change.
Ceres commissioned Mercer to create the report, Energy Efficiency in Real Estate Portfolios: Opportunities for Investors.
The global trend is toward putting a price on greenhouse gas emissions, thus ending the practice of disregarding the cost of polluting, says the report. But the report also notes that ending free pollution may expose unprepared investors to unnecessary investment risks through higher energy costs, existing and possible legislation demanding increased efficiency, and competition from more efficient buildings.
The report draws on key industry and academic research on building efficiency’s economic impacts. It also outlines steps and best practices for leveraging efficiency in real estate investments, and includes case studies from leading investors that show the possible positive impacts of efficiency upgrades.
For instance, in 2008 financial services giant TIAA-CREF established a goal of reducing energy use in its real estate portfolio 10 percent by 2010, and the company is well on its way to meeting that goal. The effort is already yielding $4 million a year in reduced energy costs across the portfolio, and all new buildings TIAA-CREF develops will be LEED certified, says the report.
