2023 Summer Issue of Urban Land - 73

LBA typically follows a short-term hold plan
of five to seven years. " That doesn't give us
a lot of runway for NOI, so we tend to focus
on things like window tinting rather than
replacing all the windows, " German says.
Financial Support for Retrofits
A variety of funding options are available
for retrofits, including green loan programs
from Fannie Mae and Freddie Mac, the Commercial
Property-Assessed Clean Energy
(C-PACE) program from the U.S. Department
of Energy, on-bill financing through utility
companies, and financing through energy
service companies and green banks. Also,
a variety of incentives, grants, and rebates
are available from state, local, and federal
governments. Inflation Reduction Act (IRA)
incentives can be combined with state and
local incentives and rebates for elements
such as cold-climate air-source heat pumps,
heat-pump water heaters, geothermal heat
pumps, efficient heating and cooling equipment,
and electric panel or circuit upgrades
for new electrical equipment.
" We always look for incentives and typically
plan our improvements to catch an
incentive before it expires or wait until one
starts, " says Alschuler.
In New York, the New York State Energy
Research and Development Authority
(NYSERDA) introduced the Empire Building
Challenge, which includes $50 million in
grants to support energy efficiency retrofits.
" One of the biggest challenges to decarbonization
is tall existing buildings in coldclimate
locations like New York City, " says
Michael Reed, assistant director of advanced
efficiency solutions at NYSERDA. " The Empire
Building Challenge's goal is to support companies
that demonstrate energy efficiency
projects while driving the market and competitors
to make similar retrofits. We also
want to fos-ter partnerships between solution
providers and property owners. "
Among the simplest steps for property
owners is to adapt smart controls so energy
use more closely correlates with occupancy,
Reed says. " We want to avoid heating and
cooling places that are unoccupied, which
was vividly demonstrated during the early
months of the pandemic when occupancy
was near zero but energy consumption
declined just 30 percent, " Reed says.
To qualify for a grant, each company
needed to provide a road map with specific
retrofit projects to achieve the goal of phasing
out fossil fuels while maintaining comfort
and sustainability, Reed says. " The idea is that
once the cost/benefit of retrofits is proven,
companies won't need subsidies, " Reed says.
" We need the market to prove that these retrofits
can be replicated at scale. "
Monitoring Performance Metrics
Many systems are available to analyze building
performance. For example, RENU uses
the Home Energy Rating System (HERS)
Index to evaluate energy use in its multifamily
buildings.
" In our South Winds apartments in Fall
River, Massachusetts, we had a HERS rating
of 170 before our retrofits and one in the 30s
afterwards, " says Gray. " That's an 80 percent
energy savings. "
Besides tracking energy consumption with
sensors and through bills, developers rely
on Leadership in Energy and Environmental
Design (LEED), the Building Research Establishment
Environmental Assessment Method
(BREEAM, the U.K. equivalent of LEED), and
Europe's Carbon Risk Real Estate Monitor
(CRREM) for benchmarking progress.
LBA partners with Yardi Pulse for realtime
monitoring of the HVAC system and
fault detection in all its office buildings, says
German.
" Yardi Pulse uses AI [artificial intelligence]
overlays to learn how the building operates
and make minor adjustments that keep tenants
comfortable but reduce consumption
and save money, " German says. In the United
States, retrofitting is still in its infancy, but it
will pick up over time, Izzo says.
" As companies and cities miss their targets,
policies are likely to come down harder
and [companies] will risk fines and face
compliance consequences, " Izzo says. " Plus,
people are conscious of the impact of buildings
on the environment and want better
choices, so the market is responding. " UL
MICHELE LERNER is a freelance writer, editor, and author covering
real estate, personal finance, and business topics for such publications
as the Washington Post, USA Today, and others.
SUMMER 2023
URBAN LAND
73
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2023 Summer Issue of Urban Land

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