Commercial Building Investors Moving to Survival Mode: What That Means To Service Providers

I found a great article in FacilityBlog2009 that documents the findings of a recent study on the commercial real estate market.

Battered by the U.S. economic recession, the commercial real estate market is struggling to maintain values across all property types and geographic areas, kicking a growing number of investors into survival mode as they painfully watch the value of their existing portfolios decline, according to investors and real estate professionals surveyed as part of the first quarter 2009 PricewaterhouseCoopers Korpacz Real Estate Investor Survey(R).

Commercial property investors are faced with tight credit, rent decreases, increasing vacancy rates and lowering asset values.  They are aggressively pursuing strategies to protect their asset value to survive the market and take advantage of a recovery forecasted for later 2010.  So, what are they doing?  They’re proactively signing leases and renewals and offering incentives and rent reductions.  Most are looking for ways to cut operating costs to survive.  “Tenants are in the driver’s seat, and landlords are in survival mode, trying to preserve revenue streams in one of the harshest ownership environments ever encountered,” said Tim Conlon, partner and U.S. real estate sector leader for PricewaterhouseCoopers. “

So why is their bad news good for you?  Easy, you can help them survive.  How?  By lowering their operating costs, specifically their energy utility bills.  Our research based on over 100 buildings tested throughout North America indicates that there are tremendous opportunities for energy savings in commercial buildings.  Our soon to be published research study, 2009 State of Building Performance, North America, indicates that by focusing on HVAC and lighting systems, service providers can help building owners substantially reduce their operating expenses.

Don’t be fooled by buildings with high EnergyStar™ ratings, recent recommissioning, Building Management Systems, and Facilities Management staff that claim everything is under control.  There are ALWAYS significant opportunities for savings, you just have to look.

So, if you want to help your customer survive over the next 18 mos and build a relationship that lasts for years, help them reduce their energy bills.  Use your service contracts to uncover No Cost/Low Cost ways to reduce their operating costs and uncover retrofit opportunities that have acceptable payback periods.  People tend remember those that help them in difficult times.

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