Technology and energy have become ever more closely linked in property management. Indeed, technology has threaded its way into every aspect of commercial real estate.

In any event, property managers, at one time, would anticipate energy costs running about 30% of overall building operating costs, but today they account for at least 35% to 40%, notes Ian King, executive vice president of Jones Lang LaSalle in Parsippany. That's even with the recent reduction in costs that we've been experiencing.

"HVAC is the biggest consumer of an operating budget, so we take the approach of coding and retro-commissioning the HVAC system in a working building, examining every piece of equipment and re-commissioning it to make sure it is functioning within its design specs," King explains.

He adds that the major push in property management today is direct digital control technology. New Web-based control technologies are more intuitive and capable of learning an existing building's systems operations and integrate additional information such as weather and energy prices. These controls enable property managers to make adjustments remotely and save money by not having to pay an engineer to come in and make them.

But the next step, integrating systems, is even more interesting, and some building managers already have taken it.

"For example, connecting the key card security system with lighting and temperature controls," King says. "So when a worker comes in after hours, a swipe of his or her key card alerts the HVAC to adjust the temperature in the spaces used by the individual entering the building. Essentially, the technology tells the various systems they have to be ready to provide service. It gives the building a backbone into which various software systems are plugged in.

"Technology is so much better today," King continues. "Lighting controls that harvest daylight and ambient light; motion sensors to control lighting in rest rooms, conference rooms and private offices, even in stairwells in some cases—all of these things can be programmed."

How much all of these cost-cutting measures actually cut costs can be hard to put a number on. That can make them hard to sell to building owners, according to King.

"I will say that to implement any of these technologies, you really have to demonstrate it has a fast return on investment," he explains. "Given the rise in the cost of energy, however, it has made lighting retrofit project payback periods very short, sometimes less than a year."

The other side of the energy equation for property managers is buying it as cheaply as possible, and that is creating demand in property management companies for people who are savvy about the energy markets.

"Energy has been misunderstood for years, but now it's so important that it's more common to have an energy manager in-house," according to Kurt Padavano of Advance Realty Management, which employs an energy manager.

There are several pieces to the puzzle. On one side is buying energy in a deregulated market, where property managers can bid competitively for it and lock in their rates. There is always a risk that you could wind up paying more as the market cycles up and down. But there is also the benefit of predictable energy prices over time.

Advance has aggregated its energy buys both to cover multiple buildings and with other companies. "We have done it both ways, Padavano says. "In the late 1990s, we did aggregate purchases with other companies through BOMA, and the users that participated saved a combined total of $1 million over what they would have spend with the public utility companies."

Technology continues to worm its way into more of the day-to-day operations of real estate, and one area in which it is playing a paramount role today is the give-and-take between property managers, tenants and building owners.

"It comes down to communications with tenants and owners," says Larry Zipf of Fameco Management Services, a 50-year-old firm whose properties under management include 75 retailers. "The ability to disseminate information by uploading reports to a database, even as simple a thing as being able to send digital photos, can help communicate information more efficiently.

"The administrative side has become much more accelerated," Zipf concludes. "Some of the bigger firms work off of national call centers but that is a double-edge sword. It takes some of the control from the individual property manager."

SIDEBAR

Youthful Energy: Filling Utility Slots

Some North Jersey residents have an opportunity to pursue careers in the energy business, thanks to a new partnership between PSE&G and Passaic County Community College. The result of the partnership is PCCC's new utility technology degree program, which is designed to create a pool of technically skilled and educated workers to fill entry-level positions at a time when the utility industry is facing a looming workforce shortage.

The two-year degree program combines classroom training with hands-on technical apprentice-level training. Students works toward earning an Associate Degree in Applied Sciences, and qualified graduates are offered appropriate positions at PSE&G.

"This program is proving to be an important pipeline of new and diverse talent to our company," says Ralph LaRossa, PSE&G's vice president for electric delivery. "Some 20% of our employees are likely to retire over the next couple of years, and we'll need qualified people to fill their shoes. This program will help supply those people."

"What's more," LaRossa continues, "the program is providing New Jerseyans with access to jobs that they might not otherwise have, giving them an opportunity to train side-by-side with some of the best. It also gives them the opportunity to see whether a career in the energy industry is right for them."

It's estimated that in the energy industry, about half of the utility workers employed today, or about 300,000 workers altogether, will retire within the next 15 years. That's according to a 2005 study by the Utility Business Education Coalition.

A separate report, issued in 2005 by the John J. Heldrich Center for Workforce Development at Rutgers University, meanwhile, analyzed the responses of 39 utility companies that took part in a workforce survey. The study similarly found that first-line supervisors and managers are indeed expected to be a top hiring need through the year 2010.

Instant Insights /

Property Management: Extra Energy

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