The optimization of commercial real estate buildings has become an essential practice, driven by the dual needs for enhanced performance and sustainability. Stakeholders demand that commercial real estate buildings meet these objectives as tenants, investors, and regulators demand efficiency and environmental responsibility.

What is Building Optimization?

Building optimization is the systematic process of improving a building’s operational efficiency. It focuses on reducing energy consumption, enhancing comfort levels, and minimizing environmental footprint. Optimizing building efficiency and performance in the commercial real estate (CRE) sector is essential to meet worldwide sustainability requirements.

The benefits of energy optimization

Energy optimization in buildings offers a range of benefits, including:

  • Cost savings: By reducing energy usage, you directly lower the cost of utility bills. For example, efficient HVAC systems can reduce energy consumption by up to 50%, according to the Department of Energy. This translates into substantial savings over time.
  • Environmental impact: Buildings account for a large proportion of global CO2 emissions—around 40%, according to the United Nations Environment Programme. Optimizing energy use can help reduce these emissions and contribute to the effort against climate change.
  • Risk mitigation: Energy optimization can also help mitigate risks associated with energy price volatility and supply disruptions. It reduces a building’s dependency on the grid and enables more efficient use of renewable energy sources.
  • Higher property value: According to a summary of studies by the International Energy Agency, a building’s value increases by 8.5% and 26% from energy performance improvements. These increases are also seen with rent payments rising between 2.7% and 9% after energy efficiency increases.

How do we optimize buildings to make them energy efficient?

Design strategies, technological innovations, and operational best practices can improve real estate energy efficiency efficiency.

  • Energy-efficient design: Incorporating energy efficiency in the design stage can significantly impact. This includes architectural elements like orienting the building to maximize natural light and ventilation and using materials with high thermal mass to regulate indoor temperatures.
  • High-efficiency systems and appliances: Replacing older HVAC systems, lighting fixtures, and devices with energy-efficient models can drastically reduce energy consumption. High-efficiency LED lights, for instance, use 75% less energy than traditional incandescent bulbs, with a lifespan of 25 times longer than conventional bulbs.
  • Smart building technologies: Smart thermostats, sensors, and building management systems can automate and optimize building operations, reducing energy waste. For instance, occupancy sensors can turn off lights and adjust HVAC settings in unoccupied rooms.
  • Regular maintenance and audits: Regular maintenance ensures that building systems operate at peak efficiency. Energy audits can identify areas of energy waste and opportunities for improvements.

Reducing emissions

One of the key objectives of building optimization is reducing greenhouse gas emissions. This entails leveraging renewable energy resources, such as solar and wind power, and adopting green building materials with lower embodied carbon. In essence, sustainability in the building sector is about more than just lowering energy consumption—it’s about creating buildings that coexist harmoniously with nature.

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Will the CSRD (corporate sustainability reporting directive) affect your company?

The Corporate Sustainability Reporting Directive (CSRD) initiative by the European Union to raise the bar for sustainability reporting standards among companies. This directive will likely impact businesses, requiring them to provide more comprehensive reports on their environmental performance, including energy consumption and carbon emissions.

While this may present challenges in data gathering and reporting, the CSRD also enhances the value of building optimization by providing a straightforward method of communicating your optimization efforts.

Different types of methods to optimize your commercial building

Optimizing a commercial building involves a comprehensive approach considering the building’s design, systems, operations, and occupants. A few standard optimization methods include:

  • Energy management systems (EMS): An EMS is a sophisticated system that monitors, controls, and optimizes the building’s energy use. It can automate building operations, such as lighting, heating, and cooling, based on occupancy or schedules, thereby reducing energy waste.
  • Commissioning and retro-commissioning: Commissioning involves verifying and adjusting systems in new buildings to ensure they’re operating as intended. Retrocommissioning applies the same concept to existing systems, ensuring all aspects work correctly. Average retro-commissioning projects result in energy savings of 15%, according to Energy Star, with an RoI of over 200% with annual cost savings, according to the Department of Energy.
  • Occupant engagement: Occupants play a vital role in a building’s energy use. Training and incentives can encourage energy-saving behaviors, like turning off lights and electronics when not in use.
  • Green building certifications: Pursuing green building certifications like LEED or BREEAM and following the ESG green buildings framework can guide optimization efforts. These systems provide a methodology to improve your building’s energy efficiency, water conservation, waste reduction, and more.

How to measure the effects

Assessing the effectiveness of building optimization initiatives requires tracking key performance indicators (KPIs). These KPIs can include energy usage, operating costs, and carbon emissions. Ongoing monitoring and evaluation are critical for finding new opportunities to optimize buildings and assessing the effectiveness of current efforts.

Going digital and digital twins

The ‘digital twin’ concept—a virtual model of a physical building—allows for sophisticated simulations using commercial real estate analytics to aid in optimization efforts. Digital transformation in the realm of building management not only enhances efficiency but also provides valuable insights for informed decision-making.

Continue to optimize and gather insights with data

Building optimization is a continuous journey, not a one-off project. As buildings age and user patterns evolve, continuous optimization is required to maintain peak performance. Data is pivotal in this process, offering real-time insights that guide improvements.

Connect with apps that are suitable to your building portfolio

When selecting apps for building optimization, it’s essential to understand your building portfolio’s unique characteristics and requirements.

  • Building types: Different buildings, such as offices, retail spaces, or manufacturing facilities, have unique operational requirements and energy usage. Select apps that can handle these specific characteristics.
  • Building age and systems: The age of the buildings and the methods they contain can inform your app choice. Older buildings can benefit from apps focused on identifying outdated systems, while newer buildings can use apps for optimizing existing systems.
  • Geographic location: Buildings in different areas will have unique concerns due to climate, regulations, and energy costs. Consider these local factors when selecting apps.
  • Portfolio size and complexity: A portfolio with multiple buildings or buildings in different locations can use apps that generate reports covering all properties. This allows you to oversee your entire portfolio effectively.
  • Specific goals: If you have particular optimization targets, such as reducing energy usage or improving occupant comfort, choose apps that can help you meet these goals.

Real-time data

Using real-time data gives you immediate feedback on building performance to facilitate fast-paced decision-making. Whether changing the thermostat schedule in response to fluctuating weather or identifying a sudden increase in energy usage, real-time data provides the insights you need to catch issues immediately. It also speeds up the process of optimizing your building because it reduces the amount of manual testing required to gather necessary data.

ProptechOS can get you started with optimization

ProptechOS enables your building to function as a cohesive unit. It integrates your building’s technologies and systems by acting as your building’s operating system. Unifying your Proptech solutions reduces the complexity of managing separate systems, streamlining your efforts toward optimization.

Using ProptechOS partner apps makes unifying your building systems even more accessible, as they all work out of the box with the ProptechOS platform. This means these apps can collaborate immediately without requiring any customizations or configuration.

A central platform for your smart building technologies, software solutions, and building data streamlines your data management, improves interoperability, and facilitates data-driven decision-making. Find out how ProptechOS can help optimize your buildings with a free trial!

Dr. Erik Wallin

Chief Ecosystem Officer, and founder of ProptechOS and RealEstateCore is recognized as a leader in Building Operating Systems (BOS) and making the buildings of the world smarter. He holds an MSc and a Ph.D. in Media and Computer Science from KTH Royal Institute of Technology.

Read his full bio and information here.