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Engaging Small Business Landlords & Tenants on Efficiency

Published: May 18, 2016 Finance & Real Estate | Press Release

FOR IMMEDIATE RELEASE:

Contact: Chris Potter, Institute for Market Transformation, (202) 525-2883 x311 chris@imt.org
Shawn Turner, Council of Smaller Enterprises, 216-592-2397, sturner@cose.org

Convincing small and medium building owners and tenants to value high-performance buildings is a critical step for the commercial real estate industry to save energy, reduce harmful emissions, and reach sustainability goals. In the wake of IMT and COSE's groundbreaking initiative in Cleveland, the two organizations have co-published a free resource guide that charts a pathway to better engagement and efficiency in this sector. 

WASHINGTON, D.C. (May 18, 2016) — While skyscrapers dominate many U.S. skylines, 88 percent of commercial buildings across the country are small and medium structures under 25,000 square feet in size. Recognizing the power of these smaller structures to transform our economy and environment, the Institute for Market Transformation (IMT) and the Council of Smaller Enterprises (COSE) today released “Making Efficiency Work for You: A Guide for Empowering Landlords and Tenants to Collaborate on Saving Energy & Resources,” a new resource guide created to assist building owners and tenants in getting started on improving their building performance and reaping the associated rewards.

Energy is one of the top costs for small businesses, ranking only behind labor and rent as a significant portion of annual expenses. Recognizing this, the new guide presents replicable starting points for tenants and landlords to collaborate on cost-effective sustainability solutions including: energy-saving clauses to add to a standard lease (green leases); energy management and water efficiency techniques to incorporate into existing business operations and tenant build-outs; case studies; infographics; and more—giving the commercial real estate industry a new resource to help establish programs or complement current value propositions around sustainability for small businesses.

“While retrofitting large buildings in cities such as New York is important, it’s crucial we don’t overlook smaller cities and companies with smaller portfolios that are just as interested in lowered energy costs—but often lack the resources to do so,” said Adam Sledd, Director of Market Engagement for IMT. “The only way to reach large-scale energy savings across the country is for landlords and tenants to work together in buildings of all sizes, and this one-of-a-kind guide offers a host of practical, in-the-field examples of how to do that.”

The resource guide is a product of the Cleveland Energy-Aligned Leasing Program, a two-year initiative between IMT and COSE that collaborated with 60 members of the small business community in and around Cleveland’s 2030 District, who represent over 7 million square feet of space. The program was created to improve landlord and tenant understanding of energy efficiency through a combination of education, energy audits, green lease resources, and financing options in one bundled program package—turning this effort into a blueprint for cities, towns, and local businesses across the U.S.

“COSE’s partnership with IMT has allowed both organizations to show proof of concept in Cleveland,” said Nicole Stika, Senior Director of Energy Services for COSE.  “Most small businesses prioritize revenue and growth from reduced operating expenses. We created dialogue between landlords and tenants and illustrated how energy efficiency is a pathway for business growth because it puts money back in their pocket from a source they may not have initially thought was feasible.”

The IMT and COSE work in Cleveland was recently recognized by the U.S. Department of Energy (DOE) as one of several projects selected for $8.4 million in funding through its Commercial Buildings Integration program to nationally scale up replicable, energy-efficient solutions for small and medium office buildings, apartments, stores, restaurants, and businesses. Under this work, IMT and COSE will partner with local chambers of commerce to help landlords and tenants improve the energy efficiency of more than 400 leased buildings.

In 2015, commercial buildings used nearly 20 percent of total energy in the United States—more than half of which is consumed by small- and medium-sized buildings under 100,000 square feet, according to the DOE. These small businesses consist of retail stores, offices, coffee shops, restaurants, and service and goods companies that are the backbones of their communities. Unfortunately, because their owners tend to fill multiple roles, they typically lack the time and resources needed to tap into the wealth of efficiency opportunities that exist today.

To address this problem, IMT and COSE engaged a diverse set of businesses—ranging from owners wanting to revamp old industrial facilities, to design and build companies looking to add sustainability clauses to leases for its properties, to a pastor of a church seeking lower heating and cooling costs for his congregation and nonprofit tenants, and many others—to learn of and document best practices underway.

One example highlighted in the resource guide was the program’s engagement with The Coffee House, an independent small business in a building owned by Case Western Reserve University. With a long-term lease ending, and negotiations for a renewal on the horizon, it represented a perfect opportunity for COSE and IMT to work with The Coffee House on energy-saving modifications to its lease to reduce utility costs.  The resulting efforts uncovered strategies that are projected to reap nearly $3,000 in annual utility and operations and maintenance savings with a simple payback of less than three years.

"Working with COSE and IMT helped me see how we were already using some green leasing ideas in our lease," said Eric Meyer, manager of The Coffee House. "Having Case Western as a landlord, we have been able to use the guidance of the Cleveland Energy-Aligned Leasing Program to ensure our new lease will have language that includes us in the greater sustainability plans of the University, and thereby benefiting both parties."


To download a .PDF of the resource guide and additional case studies, visit: http://www.imt.org/resources/detail/resource-guide-making-efficiency-work-for-you

To view the resource guide in Uberflip, visit: https://cose.uberflip.com/i/674800-making-efficiency-work-for-you-a-resource-guide

To view the six case studies that document best practices underway in Cleveland, visit: https://cose.uberflip.com/h/c/257907-energy-case-studies

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ABOUT IMT: The Institute for Market Transformation (IMT) is a Washington, D.C.-based nonprofit organization promoting energy efficiency, green building, and environmental protection in the United States and abroad. IMT seeks to ignite greater investment in energy efficiency in the building sector through activities including technical and market research, policy and program development and deployment, and promotion of best practices and knowledge exchange.

IMT’s Market Engagement program is a national leader in developing and executing projects that target the landlord-tenant relationship as a leverage point to generate energy savings.
For more information, visit imt.org and follow us on Twitter at @IMT_speaks.

ABOUT COSE: For more than 40 years, the Council of Smaller Enterprises has protected and advocated for small businesses in the region. Through a deep understanding of small businesses, COSE provides the right solutions and resources to help its members succeed – every day – because small business growth and success is the organization’s priority.

COSE has developed pathways to enable all size businesses to achieve improved energy efficiency, budget certainty, and cash flow, while reducing energy demand. COSE makes use of American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) Level II energy assessments and provides the savings and costs analyses of all practical energy efficiency measures for its customers, along with proposed changes to operations and maintenance procedures.

For more information, visit www.cose.org/energy and follow us on Twitter at @COSESmallBiz and @COSEEnergy.