22 Jul Better Living Through Transparency
Better Living Through Transparency
The CoStar Group offers easy access to information on energy efficiency for its investors, owners, and tenants.
By Alexandra DeLuca
As state and local governments continue to adopt building energy transparency laws, a new partnership between the Department of Energy’s Better Buildings Initiative and real estate data provider CoStar Group Inc. aims to put more energy efficiency information at the fingertips of investors, owners, and tenants.
The plan to add more energy-related information to the CoStar Group’s online property database began in 2013 when Kathleen Hogan, deputy assistant secretary for energy efficiency at the U.S. Department of Energy, and CoStar CEO Andrew Florance started discussions exploring an alliance. “People have always been interested in as much information on the efficiency of buildings as possible and CoStar has led this effort on a number of fronts,” says Hogan. “As a number of cities were moving forward on building transparency policies and making the information more available, it was an interesting conversation to have with CoStar—given that that data would be public—to pull into their database to make it readily available.”
This partnership builds on CoStar’s previous initiatives with the U.S. Green Building Council in 2006 (to display Leadership in Energy and Environmental Design [LEED] certified buildings) and with the Environmental Protection Agency in 2008 (to display ENERGY STAR ratings) for more than 15,000 buildings.
Under state and local energy transparency laws, such as New York’s Law 84—the first and biggest to collect this type of energy benchmarking data—additional information from about 60,000 U.S. commercial and multifamily buildings will become publicly accessible and integrated into CoStar’s database. Data such as ENERGY STAR scores from 1 to 100, whole building source energy use intensity and annual greenhouse gas emissions, where available, will allow people to run more searches and comparisons of property data.
“This will put energy metrics on the same playing field as other property information.” —Andrew Burr
“I think we are in an exciting time,” says Hogan. “More buildings and managers can have access to this information and can improve management and operations. There are other opportunities where the buildings will be able to respond to any energy crises information and the buildings can be part of a solution. We are on a path to not only have good quality services in our buildings but actually have buildings contribute to lower cost energy solutions more holistically as we think through some of the issues in our electricity grid.”
Beginning this summer, CoStar will begin displaying this data for buildings in Chicago and Washington, D.C. There are plans to add additional cities in the fall as more and more governments require the reporting of energy efficiency information. Cities such as Atlanta, Boston, Boulder, Kansas City, New York, Philadelphia, Portland, and Seattle already do.
“This will put energy metrics on the same playing field as other property information,” says Andrew Burr of the Department of Energy. “Energy has been a bit of a black box in real estate markets for a long time—going back many years when energy was cheap and we weren’t talking about climate change and efficiency. That is changing.”
While benchmarking is becoming a rapidly expanding policy, the landscape is craggy, according to David Hsu, a professor at MIT studying building transparency issues. Partnerships like the one between Department of Energy (DOE) and CoStar are fulfilling a need. “It is one of these really good stories on federalism,” says Hsu. “Nearly every city is pushing for this new data and sharing their data. Everyone is trying to figure out what the data looks like. That’s where you need the coordination of private and public sector.”
The partnership between DOE and CoStar includes a research arm that will aim to perform research on the impact of energy efficiency on valuation and operating income and expenses as well as tenant health and productivity. “We are going to work with CoStar to put the power of their data together with the capabilities of DOE energy experts and potentially the scientists in our national laboratories to look into the valuation of energy efficient buildings in the market-place and quantifying health and comfort and retention benefits for the occupants of buildings,” says DOE’s Burr. “There are lots of directions we can go with this type of research.”
In the end, the market itself will determine the extent of the data’s reach. “We are excited to be able to put the information forward and see how the market can react to the availability of it,” concludes Hogan. “This summer is a milestone in seeing the fruit of the work in Chicago and D.C. and there is more to come.”