The Economics of Sustainability in Commercial Real Estate

In 2010, IFMA Foundation published a white paper called "The Economics of Sustainability in Commercial Real Estate". The purpose of the white paper was to determine why many building owners are not investing in sustainability and to debunk the misconceptions of the financial impact of investing in sustainability.

They classified retrofitting energy efficiency solutions into 3 groups:
1. No-Cost Improvements
2. Low-Cost Improvements
3. Signficant Cost Improvements

HVAC optimization and performance was listed as one of the recommended no-cost solutions... 

."According to a recent report based on several case studies, energy consumption for heating, ventilating and air conditioning (HVAC) can be reduced by 20 percent by detecting mechanical faults and ensuring systems operate correctly (NSTC 2008). Many cost savings related to HVAC can be made by changing operation procedures, which do not require retrofits. "


Utilizing a sensitivity analysis, they concluded that investments in sustainability had the most predictable impact on all key financial metrics (NOI, IRR, NPV, etc.) as compared to other retrofit projects such as cosmetic upgrades.