One-Stop Report Reiterates Business Case for Energy Retrofits

This newly released report “Energy efficiency and real estate: Opportunities for investment” from Ceres and Mercer is pretty good in that it combines case studies from REITs to institutional portfolios as well as surveys and data from sources such as RREEF, McKinsey and several universities. Ceres is a coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Mercer provides consulting, outsourcing and investment services.

Here are some excerpts:

-A 2009 Maastricht University study found rental premiums of 3.5 percent on US office properties, a six percent increase in occupancy for “ENERGY STAR” buildings and a 16-17 percent premium on sales prices per square foot.

–For instance, in 2008 financial services giant TIAA-CREF established a goal of reducing energy use in its real estate portfolio 10 percent by 2010, and the company is well on its way to meeting that goal. The effort is already yielding $4 million a year in reduced energy costs across the portfolio, and all new buildings TIAA-CREF develops will be LEED certified.

–The California Public Employees’ Retirement System (CalPERS), the world’s largest pension fund, is also on target to meet a 20 percent energy use reduction goal in its real estate by the end of this year, “As fiduciaries, focusing on energy efficiency in our real estate portfolios just makes sense,” said CalPERS CEO Anne Stausboll. “CalPERS invests in millions of square feet of real estate,” said Stausboll, “so cutting back on energy use and lowering operating costs can only boost the value of the properties in our portfolio, while also contributing to climate change mitigation.”