Enhancing the Value of Real Estate with HVAC Automation

The Economics of HVAC Automation for Commercial Real Estate

CNA Finance, June 9, 2015. Image credit: geralt

What is HVAC Automation? Quite simply taking all of the heating and cooling equipment in a building and making it work more efficiently than just on a schedule or by immediate demand. The return for the effort to automate the operation of such equipment is good for several reasons.

HVAC Automation is typically an integral part of any “Green Building” project. Part of the reason for this is that automation systems provide the ability to measure variables and verify equipment operation. This measurement and verification process not only allows you baseline data but also to prove the HVAC systems are running the way they were designed to run.

So, why does automation present such opportunities for the business of Real Estate?

Primarily, it enhances the value of the real estate. The value of most commercial buildings is related to the net operating income. Lowering utility costs increases the net operating income on a dollar for dollar basis. Every $0.10/square foot saved in energy could increase the market value of the property by $0.80/square foot. A 100,000 square foot building could increase in value by $120,000 by reducing energy costs $0.15/square foot (according to the Minnesota Metropolitan Energy Policy Coalition http://www.mepc-mn.org/).

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