Unlocking hidden value in Class B/C buildings

BOMA International announces the release of a new research report created in partnership with the Rocky Mountain Institute (RMI) and the Urban Land Institute (ULI): Unlocking Hidden Value in Class B/C Office Buildings: Best Practices for Pursuing Low-Cost, High-Impact Energy Efficiency and Green Leasing Strategies. The first study of its kind, this report offers guidance and strategies for implementing energy efficiency and green leasing measures specifically tailored to the owners and operators of Class B and C office buildings.

Compared to its Class A counterparts, Class B and C office properties typically are older buildings with fewer technologies in place. While owners and operators of these properties are often eager to enact sustainability strategies, they often can be constrained by smaller budgets, limited staffing and the high demand of day-to-day operational needs. As a result, Class B and C buildings often trail Class A buildings in adopting energy efficiency strategies and green leasing provisions. However, they also are the asset class with the most to gain from these measures.

Per this report, these untapped sustainability opportunities have the potential to:

• Reduce operating expenses for a Class B or C building by between $0.26 and $0.61 per square foot;
• Increase net operating income (NOI) for Class B or C properties by between 1.9 percent and 4.3 percent; and
• Boost Class B or C property value by approximately $4 to $8 per square foot.

Even with a clear business case, the report recognizes that building owners may still delay action due to three core challenges that Class B and C properties face: being information constrained, resource constrained and funding constrained. These hurdles are accounted for in each implementation strategy, providing Class B and C office building owners and operators with an adaptable framework for success.

"Pursuing energy efficiency and green leasing doesn't have to be complicated, especially when owners already have enough on their plates," adds Greg Hopkins, manager of RMI's Building Practice. "We've simplified things so they can focus on low-effort, high-impact strategies that can create win-wins for their tenants and their own bottom lines."

Download the report here.