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Environmental, Social & Governance (ESG)

Socially-conscious investors use ESG as a framework to screen potential investments.

Commercial real estate assets have always been primarily evaluated based on the financial return. Although the return on investment (ROI) remains the most important tool for evaluating a physical asset, the concept of ESG has been pushing its way into the asset evaluation process since the mid-1960s but growing in importance in the last few years.

The concept of ESG has begun to transform the evaluation process of assets. It is increasingly more common for organizations to be evaluated by additional parameters such as social, energy and environmental performance. Today both purchasers and lenders are using ESG criteria to screen potential investments, including the underwriting of loans and equity stakes. According to a 2020 survey published by Fitch Ratings, 67 percent of banks are screening their loan portfolios for ESG risks. Companies found with lower ESG standards may be seen as a greater financial risk. The same goes for buildings with low ESG standards. As ESG grows more relevant in the global economy, it is important to evaluate its inclusion in the real estate industry. Below we look at the three factors of ESG in relation to commercial buildings.

 

ESG Assessment & Program Management

VERTEX’s skilled assessors evaluate a property’s ESG attributes to help our socially conscious clients manage ESG programs and meet their internal goals and compliance needs. We understand the growing need for companies to incorporate energy efficiency and sustainability into their investment decisions and provide expertise in incorporating this emerging due diligence concern into any property evaluation.

 

Energy Audits and Conservation Assessments

VERTEX performs a walkthrough of the facility to visually observe materials, systems and building components for potential energy saving opportunities. Observed items include lighting, motors, heating systems, air conditioning equipment, hot water generation and distribution and energy management systems. We also evaluate building envelope and roofing systems for potential energy saving opportunities. We consider the site potential for sustainable energy enhancements such as solar installations, geo-thermal systems, wind turbines or combined heat and power.

We align gathered information with past utility usage data to determine appropriate energy conservation measures and format them into an easy to understand report of “next steps.” Research of available incentives and sponsored rebate programs is performed for each recommended measure. Our diverse inhouse professional network allows us to provide turn-key solutions to many of the conservation measures we discover during a site-specific audit.

ENERGY STAR Certifications VERTEX energy efficiency experts have extensive experience benchmarking and certifying buildings of all types within the ENERGY STAR program. VERTEX’s competitively priced service includes a visit to the building to observe general building operations and systems, development of a building profile within ENERGY STAR Portfolio Manager, utility consumption data review and entry, and filing for certification for buildings with a score of 75 or higher. VERTEX also has in-house staff with the knowledge to identify low and no cost energy conservation measures for building improvement to accelerate achieving certification and realizing real utility cost savings.

Building Measurements (Industrial Sites) VERTEX performs building measurements in accordance with the Building Owners and Managers Association (BOMA) guidelines. By comparing calculated area measurements to reported values, we offer the ability to confirm that rental space areas and overall square footage, so that area-based charges (utilities, rent, CAM) are accurately reflected. This service is commonly performed during our PCA site visits, providing an efficient way to obtain additional information from a single mobilization.

 

Energy Disclosure/Benchmarking Services

At VERTEX, our management and consulting professionals help clients ensure their properties comply with the local energy assessment and disclosure laws. We can assist you with optimizing the energy expenditures of your building, reducing its environmental impacts, and meeting relevant utility reporting requirements.

Our energy disclosure services include:

  • Annual utility benchmarking
  • Energy assessment compliance
  • ENERGY STAR Certification and Greenhouse Gas Emissions
  • Exemption and extension filing
  • Green financing reporting

The experienced VERTEX team can assist you with any aspect of building assessment and help ensure safety and compliance. We’re at your service for any additional information.

 

ADA Compliance Reviews

Where needed, our Property Condition Assessments can be designed to include a review of the property to determine compliance with Title III of the Americans with Disabilities Act and the Federal Fair Housing Act.

 

Property Condition Assessments

VERTEX utilizes the latest iteration of ASTM’s Baseline Property Condition Assessment Process (E2018) as a basis for our evaluations. Our estimated renovation costs are based on current market rates, enabling stakeholders to project reasonable budget figures when considering property values. VERTEX’s PCA reports exceed the requirements outlined by ASTM, and take the cost estimating and long-range budget forecasting a step further by including an additional Capital Needs estimate for longer-term evaluations.

 

Building Retro-Commissioning

VERTEX provides in-depth evaluations on systems of existing buildings, whether or not it has been commissioned before. From inspecting existing equipment to reviewing maintenance records and operating procedures, our Cx professionals identify performance gaps, optimize existing systems, and advise the owner and operator team with actionable strategies and measures that have solid rates of return.

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Ryan G. 2022 VERTEX