Expense management is one of the main concerns for owners attempting a return to the office post COVID-19. Utilities are among the largest controllable expenses for business owners and the forced shut down has pushed the Canadian CRE industry to reexamine energy efficiency. Commercial operators have begun to analyze energy usage before, during, and after the lockdown to compare spending trends and develop conscious energy strategies.
Achieving greater savings
Yardi estimates that roughly $2M is spent on utilities annually for every 1M square feet of a portfolio. That number represents approximately between 20-25% of all controllable expenses. Even an incremental improvement in consumption can lead to drastic savings across an entire portfolio.
What do the top energy managers do to achieve greater savings? First, they identify energy users that aren’t necessary when buildings are unoccupied and turn these off. Regardless of the pandemic, commercial buildings are typically closed 50% of the time or more, due to nights, weekends, and holidays. Emergency lights, data systems, refrigeration, and HVAC all run even when the building is unoccupied or minimally occupied. Though these loads cannot be completely shut off, they can be controlled. In addition, as another simple measure, staff may be directed to shut off or unplug equipment that will not be used over a weekend such as copiers, vending machines, coffee pots, personal items in cubicles, and stairway lights.
As the industry experiences sustained shutdowns and are reconfiguring staff in the work space, implementing energy audits to find these “vampire loads” is important. Conducting these “treasure hunts” is also a recommendation of ENERGY STAR.
Energy managers look to the automating of utility invoice processing as another way to realize savings. Processing utility bills is not as simple as writing a cheque for every invoice. You might have to track down missing bills, contact utility providers to resolve billing errors or manually enter data. Through automation and services, you can save time and money and gain accuracy with an online approval workflow, timely payments, and validation of charges, consumption, and rates for accuracy.
Leveraging real-time energy data
The timing of your data is just as important as the amount of data collected. Monitoring your building’s consumption in real-time allows you to address issues as they occur (or before they occur) and will help you save money, optimize your system performance, and improve tenant comfort. Real-time data allows you to measure the specific impact of improvements and use those metrics to create long-term energy goals and projections.
Energy information systems (EIS) are affordable web-based tools, data acquisition hardware, and communication systems used to store, analyze, and display building energy data. A team of facility managers, engineers, and even accountants can use this data to make energy strategy decisions. An EIS makes baseline comparisons using advanced modeling to predict how much energy any load should consume, based on numerous interior and exterior factors. Comparing your consumption data to these baselines will allow for notable cost control measures.
Tech advances allow you to now proactively detect HVAC faults and determine severity to prevent potential problems before they arise. You can compare real-time building demand and performance against baselines based on weather and other factors. Data is now detailed and thorough enough to allow for in-depth cost and consumption trends analysis.
The increased use and integration of artificial intelligence and the IoT is driving smart data. Utility meters, thermostats, automated lighting, occupancy sensors, and many other interconnected devices have greatly improved the timing and accuracy of energy data. As we move forward with a return to the workplace, the use of AI will transform space for social distancing, maximize comfort in conference rooms with automated cooling or heating, and adapt energy expenses to new office hours.
Garnering greater benefits
Like every other aspect of your business, establishing a clear strategic direction and associated goals will result in greater cost savings and increased efficiencies. Conducting energy audits, identifying vampire loads, seeking real-time data and benchmarking, fault detection, and the increased use of artificial intelligence and IoT are tangible ways in which you can advance your company’s energy management goals. Leveraging and integrating all these tools and resources can save time and garner significant impact on multiple fronts:
* Lower operating costs – Gain visibility into real-time demand and consumption across a portfolio to increase savings on utilities and maintenance.
* Raise property value – Efficient buildings have higher rental rates and market value.
* Greater financial efficiency – Automating utility invoicing can reduce or eliminate late fees, human error on missed or duplicated payments, and risk of shutoff.
* Improved tenant experience – Efficient buildings lead to increased tenant comfort and fewer complaints, which is particularly relevant at a time when your tenants are transitioning into a new work environment.
* Higher investor expectations – An energy efficient portfolio can help investors meet Environmental, Social, and Governance (ESG) requirements and yield higher returns.
Though energy strategies focus on expense reduction, the advantages of leveraging technology and services reap benefits that address both the bottom line and stakeholder satisfaction. At a time where we are navigating through the uncertainty of the pandemic and the evolving work environment, systems will continue to learn and predict with more efficiency and we can leverage these insights and adjust to data for a more sustainable and efficient future.
Yardi Pulse is a connected platform that helps manage energy intelligence and automate energy equipment to lower costs, reduce consumption, and improve efficiency. Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.
Montreal startup uses AI to set real-estate prices – Montreal Gazette
The pandemic has been devastating for so many businesses, but it has also provided opportunities for other entrepreneurs. Take the case of Montreal brothers Mark and Jordan Owen. Both saw their lives significantly altered by the COVID-19 crisis.
Mark, 28, was working for a local real-estate development firm and business had ground to a halt in the spring. Jordan, 26, was in a master’s program in real-estate development and city planning at the Massachusetts Institute of Technology (MIT) and had come back to Montreal in March because all in-person classes had been cancelled.
That’s when they had the idea of starting up a company to produce reusable masks. They founded Bien Aller, named in honour of the Quebec COVID catchphrase “Ça va bien aller.” They created the firm with a friend, Sean Tassé, who had been laid off from his job at a construction-management firm because of the pandemic.
Six months later, they’ve sold about 300,000 masks and they’re still producing them at facilities in Montreal and South Korea. Then the Owen brothers, Tassé and another friend, Benoit Thibeault, had a notion for a more unusual startup. The Owens’ background in Montreal real estate had them thinking that what developers and brokers could really use is a more reliable way to set prices for houses and condos that are going on the sales or rental markets.
Real Estate Investments in Greater Vancouver Offer Most Attractive Investment Yield
Is there an investment asset that can produce a 366 percent return in a three-decade span? Yes, it is the housing property in Canada. Is there an investment asset that can beat this performance? Yes, it is the property in Greater Vancouver in British Columbia, Canada. Indeed, Greater Vancouver has proven to be one of the real estate investment hotspots, given its appeal as an investment market that boasts natural beauty, strong economic and demographic fundamentals, and financial stability, which ensures optimal yield for a low level of investment risk.
Property prices in Greater Vancouver, BC, have risen by some 473.7 percent in the period between 1980 and 2009, yielding, on average, a spectacular 17 percent per annum over the noted period. In other words, according to the Canadian Real Estate Association (CREA) and RE/MAX Canada, the average price of residential property in Greater Vancouver in 1980 was slightly over $100,000. Today, that same property is worth, on average, somewhat more than $574,000.
The noted return on investment looks incredibly attractive, given the low risk associated with residential property investments. Investments in residential real estate in Greater Vancouver have been characterized by exceptional stability. The average price of a house in Greater Vancouver dipped seven times in the past 30 years. Most of the dips occurred in the late 1990s. However, all declines in average prices of homes in Greater Vancouver have been exceptionally mild, with the largest annual decreases not exceeding 3.5 percent.
This performance of real estate investments in Greater Vancouver looks remarkable compared to the implementation of property investments in the Canadian housing market as a whole or performance of investments in most other regional real estate markets in Canada. As noted earlier, the average price of a property in Canada has risen by 366 percent between 1980 and 2009. This translates into an average annual return of 13 percent in the same period. Only Victoria, Regina, Toronto, and Ottawa have recorded returns higher than this average for Canada as a whole. Victoria, located in British Columbia, has the second-highest return on residential real estate investments in the Canadian property market. An investment in Victoria’s housing property has returned 448.5 percent in total return, or 16 percent on average each year between 1980 and 2009. This makes British Columbia the best performing regional property market in Canada.
On the other hand, taking an international investment perspective, even less robust, would have been investment returns on U.S. real estate. Based on the average values of homes in the United States between 1980 and 2009 (using the Freddie Mac Conventional Home Price Index), an investment of $100,000 in residential properties in the United States in 1980 would be worth $382,576 today. This would represent a total return, measured by the increase in home prices, of 283 percent over the noted period. In other words, an investment in the real estate market in the United States would have produced an average nominal yield of 10 percent per annum, which is much lower than that earned on the property investment in Greater Vancouver.
Investments in residential real estate in the Greater Vancouver area look exceptionally appealing, given their outstanding performance relative to property investments in other regions of Canada and the U.S. real estate market. Therefore, investing in Greater Vancouver’s property market can represent an investment choice that promises high yield for a low level of investment risk.
Vancouver real estate: early September numbers show steep drop in sales from August highs – The Georgia Straight
Home sales in the city of Vancouver are dropping big time.
This is based on tracking by real-estate site fisherly.com as of late morning Friday (September 25).
Compared to record highs in August, early numbers for September show a steep decline in transactions.
In August, a total of 490 condo units sold in Vancouver.
As of this posting September 25, fisherly.com recorded 202 condo sales so far this month.
Last month, 212 detached homes changed owners.
September sales so far show 114 freestanding houses sold in the city.
As for townhouses, 99 sold in August.
As of September 25, only 49 townhouses have been purchased.
Vancouver home sales peaked in August, following a steady recovery that started in May.
Transactions crashed in April during the height of the COVID-19 lockdowns.
RBC Economics previously issued a report noting that pent-up demand for homes drove real estate sales in the country this summer.
However, according to the bank’s report, this demand is largely spent, and that the market’s momentum is expected to decelerate in the fall.
The Canadian Real Estate Association has forecast that after its highs and lows, 2020 may likely end up as a “fairly middling year overall”.
It remains to be seen whether the Vancouver market will stage a late September rally to boost numbers.
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