Real eState
Implementing new energy strategies post COVID-19 | RENX – Real Estate News EXchange
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.
About Yardi
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.
Real eState
The real estate sector's unique view of 2024 — and what's to come – Yahoo Finance
This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:
Despite a rough few days for the S&P 500, which is still comfortably in the green this year (up 6%), one sector of the stock market is feeling more pain than the rest.
The perception that rates might stay higher for longer is hammering the real estate sector, even as debate rages about how many times — if any — the Federal Reserve will cut rates this year.
The group is far and away the worst performer in the S&P 500 for 2024, down more than 10%. The bulk of those declines have come in the past two weeks, as Treasury yields have climbed to their highest level since November and investors traverse the acceptance phase that the hoped-for cuts are not on their way.
Now investors are faced with the question of whether to buy the dip or, to quote another market cliché, risk trying to catch a falling knife.
One real estate investor said the rent indicators she’s seeing in real time are encouraging on the inflation front. That’s in contrast to the much-criticized rental barometers that the Fed relies on.
“If you take into account real-time shelter costs, it’s much lower than what’s in the prints,” Uma Moriarity, senior investment strategist at CenterSquare, told Yahoo Finance. “We think inflation is trending in the right direction.”
That’s why she’s still confident in three rate cuts this year — a view, of course, that the market has been moving away from. It’s also why she’s still confident in real estate. That, plus the fact that stocks are relatively cheap.
Read more: What the Fed rate decision means for loans and mortgages
The reasons that real estate stocks suffer when rates are on the rise are twofold. First off, the companies tend to carry a lot of debt, and as rates go higher, it becomes more difficult to service or refinance that debt. Secondly, with relatively high dividend yields, the stocks compete with instruments like money market funds for investing dollars.
It’s traditionally been tough for real estate stocks to rally in the face of rising rates. But if Moriarty — and Citigroup — are right, they might not be rising for as long as the broader market anticipates.
Julie Hyman is the co-anchor of Yahoo Finance Live, weekdays 9 a.m.-11 a.m. ET. Follow her on Twitter @juleshyman, and read her other stories.
Click here for in-depth analysis of the latest stock market news and events moving stock prices.
Read the latest financial and business news from Yahoo Finance
Real eState
Celebrity real estate agent Mauricio Umansky explains when housing prices will come down – Fox Business
Real eState
Real Estate Stocks Fall As Mortgage Rates Rise To 4-Month Highs: 'Inflation Is Proving Tougher To Bring D – Benzinga
Real estate stocks slid at Wednesday’s market open, weighed down by the latest disappointing data on housing starts and a spike in mortgage rates, darkening the outlook for the sector.
By 9:00 a.m. EST, the Real Estate Select Sector SPDR Fund XLRE had dropped by 0.3%. This marked its fourth consecutive day of losses and set a course for its lowest close since the end of November 2023.
The fund has also slipped below its 200-day moving average, a critical long-term benchmark, signaling that investor sentiment has turned negative.
The average interest rate for 30-year fixed-rate mortgages with loan balances up to $766,550 climbed by 12 basis points to 7.13% for the week ending Apr. 12, 2024, according to the latest figures from the Mortgage Bankers Association. This rate is the highest recorded since early December.
On Wednesday, the yield on a 30-year Treasury bond, a key benchmark for long-term mortgage rates, traded at 4.75%, at the highest since mid-November 2023, as Fed Chair Powell admitted that there has been a lack of progress in the disinflation trend.
Chart: Real Estate Stocks Fall Below Key Long-Term Moving Average As Inflation Bites Again
Weaknesses In Multifamily Segment Continue
Joel Kan, MBA’s Vice President and Deputy Chief Economist, explained the rise in rates, stating, “Rates increased for the second consecutive week, driven by incoming data indicating that the economy remains strong and inflation is proving tougher to bring down.”
Despite the uptick in mortgage rates, there was a 3.3% week-over-week increase in the Market Composite Index, which measures mortgage loan application volume.
Kan further noted, “Application activity picked up, possibly as some borrowers decided to act in case rates continue to rise. Purchase applications were the primary driver of this increase, although they are still about 10% lower than last year’s levels. There was a slight uptick in refinance applications, mainly due to a 3% rise in conventional applications.”
Chart: US 30-Year Mortgage Rates Rose To The Highest Level Since Late November
The real estate market’s challenges are linked to affordability and a shrinking availability as the supply of new homes falls.
Andrew Foran, an economist at Toronto Dominion Securities, commented on the trend in home building, “Homebuilding activity moderated in March as weakness in the multifamily segment persisted and the single-family segment gave back most of its considerable gain from the prior month.”
Data revealed a 14.7% month-over-month decline in housing starts in March, with the figures dropping to 1.32 million annualized units, significantly below the anticipated 1.49 million.
Both the single-family and multifamily sectors experienced declines, with single-family starts down by 12.4% (or 145,000 units) and multifamily starts plummeting by 21.7% (or 83,000 units). This retreat in multifamily starts marked the lowest level since April 2020.
Additionally, residential permits decreased more than expected in March, falling by 4.3% month-over-month to 1.46 million annualized units. This included a 5.7% drop in single-family permits—the first decline in fifteen months—and a 1.2% reduction in multifamily permits.
Rising & Falling
The weakest performers among real estate stocks with a market cap of at least $1 billion on Wednesday were:
Name | 1-day %chg |
---|---|
Prologis, Inc. PLD | -6.55% |
First Industrial Realty Trust, Inc. FR | -3.33% |
STAG Industrial, Inc. STAG | -2.89% |
EastGroup Properties, Inc. EGP | -2.89% |
Rexford Industrial Realty, Inc. REXR | -2.35% |
Those showing the highest gains were:
Name | 1-day %chg |
---|---|
SL Green Realty Corp. SLG | 3.18% |
Opendoor Technologies Inc. OPEN | 2.55% |
Medical Properties Trust, Inc. MPW | 2.49% |
eXp World Holdings, Inc. EXPI | 2.32% |
Vornado Realty Trust VNO | 2.25% |
Now Read: Best REITs to Buy in April
Image: Midjourney
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