And tenants, who would be delighted to cut utility costs, don't have the authority to make capital improvements. It's a deadlock, but one that Gossett's company, Transcend Equity Development of Dallas, has a way to overcome.
Under unique agreements worked out with landlords, Transcend Equity invests in capital energy improvements and then earns its returns from the energy savings it is able to squeeze out of commercial real estate. For example, Transcend Equity was hired in 2004 by the private investors who owned a 1920s-era 10-story midrise on Elm Street in Dallas where Bank of America had its offices. Transcend Equity replaced five old railcar-size boilers with new efficient units as compact as refrigerators. Most significant, the company installed a building intelligence system, which controlled temperature, and efficient lighting.
For the $1.3 million investment, Transcend Equity was able to slash energy costs 39 percent. Its deals also shield landlords and their tenants against a portion of future energy rate increases. This has been a big factor in Maryland, where Transcend Equity's largest client, Corporate Office Properties Trust, has hired the firm to make $13 million in efficiency improvements to 24 buildings. Gossett expects to realize 30 percent savings; COPT won't see any increase on that portion of its utility bill, even though electricity rates are rising rapidly in Maryland. "The problem with real estate is the economic incentive to go green is very difficult," Gossett says. "We exist to build the business case for embracing efficiency."
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http://www.usnews.com/articles/business/technology/2008/04/17/three-ways-businesses-can-save-on-power.html?PageNr=2
