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Apr. 3, 2013

Benchmarking Performance

By Barbra Murray, Contributing Editor

How long does the green sheen last? Oh, how times have changed. Ten years ago, many multifamily developers dismissed the idea of increasing project costs to expend funds on sustainable development pursuits. But today, with full proof that what has become a minimal upfront investment in eco-friendly features pays for itself in no time flat, it is the rare property owner who doesn’t pursue and tout an apartment community’s “green” aspects. But, as is frequently the case with trends, the ante is being upped with regard to the green seal of approval, and now the question is becoming, “How green is green?” Benchmarking can tell you.

Sustainable development, in terms of the actual construction process, is what it is—if you divert certain materials from landfills or utilize recycled products, the impact is immediate. But if you incorporate such features as energy-efficient windows and water-saving appliances, a property’s true sustainability can only be judged after it’s put to the test. And, in terms of energy conservation—and thus cost savings for both property owner and tenant—that is where benchmarking a building’s performance comes into play.

Some cities are already officially acknowledging the importance of instituting a system to measure building performance. “There are six cities and two states that have benchmarking requirements in the U.S. at this point, and three of those cities currently extend the benchmarking requirements to multifamily properties,” says Rachel Cluett, research analyst for the American Council for an Energy Efficient Economy. Those municipalities that are ahead of the game are New York, Seattle and Washington, DC.

The U.S. Green Building Council’s Leadership in Energy and Environmental Design is globally accepted as verification that a property has in place certain requisite features that promote environmental friendliness and energy efficiency, and while the organization’s assessment and verification tools are constantly evolving, LEED certification does not currently assess actual long-term performance.

Today, the benchmarking of building performance is occasionally pursued in commercial properties, but it’s destined to become commonplace in the multifamily sector. And if there is any source to support the theory, it’s the Apparel, Housing and Resource Management department in the College of Liberal Arts & Human Sciences at Virginia Polytechnic Institute and State University, or Virginia Tech.

The issue with deeming a property “energy-efficient” is simple. “[Certifications cover the] initial building standard, not the performance standard,” says Dr. Kathleen Parrott, a professor with Virginia Tech’s housing program.

“I can build a building that is fantastic in performance expectations, but that doesn’t tell me it’s going to perform the way it’s supposed to,” explains Parrott. “What are the utility costs over cooling season? Are you watching those from year to year? And if you’re doing improvements [to an existing building where] you’ve gone back in it and installed more efficient water systems or put into effect a new maintenance program, and you’re changing the filters, are you monitoring the performance of the energy systems?” These steps can improve performance, but employing such measures are not helpful if their success is not verifiable.

Diagnostic methods can vary. There’s the blower door test, which can help determine, almost literally, where the money is flying out of the window. As described by the U.S. Department of Energy, a blower door is a high-power fan that mounts into the frame of an exterior door and pulls air out of a residence, lowering the air pressure inside to make way for higher pressure from outside to flow in through unsealed cracks and crevices, thereby allowing the use of a smoke pencil to determine air leaks.

No one’s eager to be faced with rodent issues, but the blower door test is not unlike a tried-and-true method that exterminators utilize to find the, say, mouse-sized openings in a home.

There are simple steps and there are the more progressive steps. Infrared scanning measures thermal changes, and demonstrates through infrared photography exactly where heat loss is occurring in a building. But does green in terms of energy efficiency translate into more money through savings?

At Virginia Tech, energy auditing is getting put through the paces, and the question of the benefits of a “green” label is being asked and answered. Dr. Kimberly J. Mitchell, assistant professor with the university’s housing program, is working with students in a two-part research endeavor that measures the perceived value of LEED certification against the actual value. “The courses that we offer here range in anything from really exposing the students to what is property management to what are the standards and expectations of the industry,” she explains. The perceived value falls very much in the category of resident satisfaction. Much of the program’s most recent research results on the issue are being held close to the vest until presentation at the upcoming annual National Apartment Association Green Conference.

Colin Bixler, a financial services manager with national apartment owner and developer Equity Residential who was part of Virginia Tech’s residential property program and is involved in its ongoing research, will participate in the conference with his former professors. Speaking of his research, which compared properties in markets on both coasts, he says by evaluating LEED certified and non-LEED certified apartment buildings, the team was able to assess whether starting out on a green foot really makes a difference.

“Basically, we looked at how efficiently the buildings were run,” Bixler explains. “We interviewed all property staff from each property and got their feelings on how the property’s run and what goes into their day-to-day expenses. We broke all financials down on a per-unit basis and looked at how much they were spending on utilities and how much they were saving on utilities.”

Again, the results of the research are being kept hush-hush for the moment, but there are some broad truths about the conclusions that can be revealed. “I would venture to say that it connects with building benchmarking just because when you look at that, it gives you an idea of where the building stands compared to other ones that may have the same LEED certification. What we took away from it was that once you certify a building as LEED, that’s not the end of the game,” adds Bixler.

Just as the notion of sustainable development caught fire—LEED certification, Energy Star-rated appliances and low-flow plumbing fixtures are all practically de rigueur these days—so too will benchmarking, because starting out green is not the same as staying green. Energy Star’s Portfolio Manager program, which while currently used in the commercial property world is being pushed forward for multifamily, may be just the trick for ushering benchmarking as a common practice into the multifamily sector.

Portfolio Manager is an interactive tool that facilitates the online tracking and assessment of energy and water consumption across an entire portfolio of properties. And if it turns out that your building is as efficient as you’d intended it to be when you secured LEED certification or another official sustainable development verification, then you may have something else to shout about when courting prospective tenants. Because, as they say, the proof is in the pudding, and proof is just what some renters really want.

“There are some people who still don’t buy into [the green movement], but if you have some concrete information to show that, comparatively in this market, this building is the most efficient building, that would give more of an incentive for those who are still on the fence,” according to Bixler. “I think benchmarking will help pick up some of the fringe and keep the steam behind the green movement.”

But the practice is still in its infancy. “It’s just a very new trend, so it will be interesting to see in the next few years what the results tell us and if the results motivate us to do something,” said ACEEE’s Cluett.

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