Part of the CCI's mandate is a Energy Efficiency Building Retrofit Program, which aims to promote the retrofitting of existing structures with more energy-efficient products and technologies. Participating cities include New York City, Chicago, Houston, Mexico City, Mumbai and London, which will develop and implement energy saving programs at municipal buildings and provide incentives for private building owners to do the same.
The link between CCI and BOMA was formed to provide practical support to these lofty goals, starting with industry education says Brenna S. Walraven, BOMA International chairman and CEO and executive managing director of USAA Real Estate Co. "The MOU serves to help us expand and communicate goals of the CCI and in general, of the benefits of energy efficiency in commercial properties," she tells GlobeSt.com. "More people in the industry need to understand how readily achievable many goals are without huge capital outlays."
To be sure, CCI wants to go beyond the low hanging fruit, and have buildings implement technologies that--while perhaps costly upfront--will bring even greater efficiencies to the operations over the long run. One stumbling block to that goal, Walraven says, has been the complex contracts that are currently used by Energy Service Co., or ESCs. Another key goal under the MOU is the development of a working draft for a standard contract, Walraven says. "Our goal is to have this draft by the end of the year."
Having a standard industry contract would cut the time needed for negotiations and actual implementation from a typical two years to as little as six months. Most institutional investors are not buy-and-hold real estate buyers, Walraven notes. "Say an investor buys a commercial property--it could well sell it within two years. Unfortunately, two years is how long it can take from the start of contract negotiations with an ESC to the deployment of the equipment." A standard contact could mean an ESC and property owner could cut and sign a deal within 90 days.
Walraven would like to see incorporated in the draft clauses that make the performance contract assignable should the building be sold during the rehab, simplification of measurement verification, and a way to ensure that no personal guarantees are required--which is important for a Real Estate Trust.
Other joint activities under the MOU will include training and capacity building, with BOMA working with CCI to expand the BOMA Energy Efficiency Program to include information on the CCI Building Retrofit Program. BOMA will also work collaboratively with CCI and partner cities to stimulate the implementation of building energy efficiency, distributed energy, and renewable energy production.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
