STANDARD UPDATE: Click here to learn about ASTM-E3224, ASTM's new Building Energy Performance and Improvement Evaluation (BEPIE) standard.

Green Property Condition Reports (GPCR) provide detailed energy use analyses and utilize green recommendations to lower energy, water, and electricity usage, reduce operating costs, provide greater savings, and lower carbon footprints. Reports are completed as a modified and expanded scope of work similar to the ASTM E2018-08 Baseline Property Condition Report Standard.

Recommendations and estimates of cost for deferred maintenance, Immediate Repairs, and Replacement Reserves during the anticipated ownership term are included.

EBI Consulting’s GPCR includes green technology components and energy savings implementations and is supplemented by an Energy Audit of existing systems. Building systems and components are surveyed, and recommendations are made for replacement with green alternatives, including a financial analysis of the recommended green alternative compared to the traditional component.

Payback analyses and comparative data are also explored within this scope of work. While typically completed on multifamily properties, Green Property Condition Assessments can be completed on all property types. 

 

A NEW INDUSTRY STANDARD FOR PROPERTY CONDITION ASSESSMENTS:
INTRODUCING ASTM E-3224 (BEPIE)


WHAT IS ASTM E-3224 (BEPIE)?

Similar to ASTM E-2018, ASTM E-3224 is an industry guide on baseline standards for conducting property condition assessments.

But unlike E-2018, the new ASTM E-3224 is only focused on energy performance and improvement.

E-3224, Building Energy Performance and Improvement Evaluation (BEPIE), provides a blueprint to determine how a building's energy performance compares to similar buildings.

The new standard also helps identify the actions and costs necessary to improve energy performance to at least be comparable to market norms.


HOW DOES ASTM E-3224 (BEPIE) AFFECT LENDERS?

There are four major ways E-3224 could bring tremendous value to lenders:


1: Improvement of Collateral Value

Energy savings can help reduce a substantial portion of a building's operating expense, turning a building with energy-saving measures into a more attractive and valuable asset for both buyers and tenants.


2: Reducing Default Risk

Energy efficient buildings have lower energy costs, which can increase cash flow. This helps improve the affordability of loans or mortgages, and reduce risk of default.


3: Reducing Obsolescence Risk

A building that consumes large amounts of energy wrestles with higher operating costs, and could be vulnerable to local laws on efficient energy consumption, fines, and reduced competitiveness in the marketplace.

As an under-performing building, it is at a much higher risk of obsolescence.


4: Reducing Repayment Risk

A borrower who invests in energy benchmarking usually holds investments of comparative higher value, with higher net operating incomes, and tends to experience lower default rates.

All of these positives contribute to a reduced repayment risk.


HOW DOES ASTM E-3224 (BEPIE) AFFECT PROPERTY OWNERS AND INVESTORS?

On the buyer side, a growing number of states and municipalities now have building energy disclosure requirements and some even impose heavy fines on energy under-performers, with penalties expected to rise substantially in the coming years.

Investing in energy efficient buildings positions the buyer to achieve a higher net operating income from the property and maintain a competitive position in the marketplace.

On the seller side, maintaining a building to BEPIE standards will not only be cost-saving in the period of property ownership, but also useful as a negotiation leverage tool and for price positioning at time of sale.


HOW WILL PROPERTY CONDITION ASSESSMENTS CHANGE WITH THE ARRIVAL OF ASTM E-3224 (BEPIE)?

Most of the information needed for the BEPIE is already collected as part of the Property Condition Assessment.

The BEPIE is designed to be an adjunct to the Property Condition Assessment, with the goal of determining whether a building is under-performing compared to its peers, and if so, identify the cost of potential measures to improve energy performance to at least achieve parity with peers.

ASTM E-3224 calls for these simple steps:

  • Collecting building and energy-consuming equipment information, including whole building energy consumption
  • Weather-normalizing the building’s energy consumption
  • Benchmarking the building’s energy consumption by comparing it to the energy consumption of peer buildings in the same geographic area and climate zone
  • Determining if the building’s energy consumption meets, is greater than (“under-performing”), or is less than the energy consumption of peer buildings

And it utilizes most of the same information already collected in the standard PCA:

  • Building description information (use, size, age, etc.)
  • Description of major building components impacting energy use, such as:
    • Lighting
    • Space heating
    • DHW heating
    • Air conditioning
    • Ventilation
    • Windows
    • Renewable energy systems
  • Remaining useful life of building components to identify those near, at, or beyond their useful life (to develop probable replacement cost)


WHO IS QUALIFIED TO CONDUCT AN ASTM E-3224 BUILDING ENERGY EVALUATION?

As commercial real estate owners, investors, and lenders gain valuable insight to potential impacts and risks associated with a building’s energy performance, it becomes increasingly likely they will request that due diligence consultants incorporate the ASTM E3224 BEPIE.

EBI Consulting’s Energy and Sustainability team has the expertise to walk you through the ASTM Building Energy Performance standard and existing and pending Building Energy Performance legislation to develop unique solutions that make sense for your investments.

“EBI has been an industry leader for 30 years, successfully executing a variety of energy and sustainability assessments. Our experts combine the benefits of a traditional facility assessment with the advantages of energy saving opportunities for a holistic view of property value. We look forward to the expansion of these services, passing along savings and other benefits to building owners and operators.”

– Mike Eardley, Director of Energy and Sustainability at EBI Consulting

Contact one of our Energy and Sustainability experts today.

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