New Law Ranks Commercial Buildings by Efficiency

SAN FRANCISCO-A new law on the books means commercial building owners in California are about to see how they stack up against their peers in terms of energy consumption—and so, too, are the buildings’ prospective buyers, financiers and lessees. For owners who have been proactive, the information could push a lot of business their way as businesses look for energy efficient buildings that will help them meet their own sustainability goals. For owners who have not been proactive the imminent list could prompt improvements or result in lower occupancies and lower lease rates.

“I can’t underscore enough how forward thinking this is, and how disruptive a force it is actually going to be, within the commercial real estate market in California,” Diane Vrkic, COO of Global Energy and Sustainability Services for Jones Lang LaSalle, tells GlobeSt.com. “There can’t be a better way to go about this than by having a consistent, transparent way to label buildings on performance.”

Under AB 1103, beginning this January, electric and gas utilities are required to maintain records of the energy consumption data of all nonresidential buildings to which they provide service and, upon request of an owner, upload those records to a secure online interactive energy management tool maintained by the US Environmental Protection Agency that tracks and assess energy and water consumption. The Energy Star Portfolio Manager allows users to identify under-performing buildings, verify efficiency improvements, and receive EPA recognition for superior energy performance.One year from January, anyone looking to buy, finance or lease an entire building will be entitled to obtain the building’s Energy Star Portfolio Manager benchmarking data and ratings. The Energy Star program rates buildings on a scale from 1 to 100 against other buildings within its class. Buildings within the top quartile will be eligible to be recognized as an EPA Energy Star Building and can use the “Energy Star Label” to communicate its energy efficiency to tenants, lenders, and other stakeholders.