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Press release

Out of the Worst of Times

04-07-2009 06:12 PM CET | Energy & Environment

Press release from: Chelsea Group

/ PR Agency: Communications Pacific
Times are tough. Every day brings news of more economic trouble. Jobs lost. Businesses closing. Budgets cut, investments deferred. Sighs of concern, wringing of hands.

The stories are filtering in of building owners cutting back on maintenance, trying to save a few bucks. It is happening, no question. And if the well is dry, if there is no revenue, there is little choice but to cut any expense. On the other hand, if there is a place to avoid cutting, maintenance of a building is that place. The long term costs of deferred maintenance are well documented – for every emergency repair needed to stay in business take the cost to properly maintain and repair the equipment and square it, that’s right $10 in cost becomes $100.

On the other side of this equation is the wise owner, and the reasonably deep pocketed owner, who sees that “this too shall pass.” Eventually the economy will sputter and backfire no more, the engine will start and the economy will gradually roll back into high gear. What, this wise owner asks, should I be doing while the markets are down.

Our work with Real Estate Investment Trusts, pension funds, and major asset management firms tells us that a large portion of these folks see that repositioning their buildings now will help along the return of good financial times. And the watch word for them is … sustainability.

There are three motivators working at the same time for these folks. First, savings on efficiency improvements has a high return on investment. In one group of office buildings comprising over 5 million square feet, a full on-site sustainability audit showed an overall group investment of $5.8 million would yield a net present value in excess of $17 million; or another measure, the payback on that investment was 29 months. Any other investments out there with that return?

Second, there are solid Washington drumbeats that a cap-and-trade carbon tax is in the offing. The time is now to know where you will stand on this and what you can do about it. This same portfolio operates 16% below the national average in carbon production per square foot of space. More than likely they will be able to sell carbon tax credits. Further, if they implement the outlined programs, in the space of a year, that same portfolio will be 31% below the national average. The potential revenues from that were not counted in the original payback outlined above.

Third, green is the new gold when it comes to building resale. The widespread belief among leaders in the real estate industry is that future building selling prices will depend on how efficient and sustainable a property proves to be. The wise owners are transforming their “energy hogs” into silk purses in preparation for the next buying spree, projected now for 2011.

So putting it back together, if a shortsighted cost cutting approach is taken today, the damage will continue for a long time. Look forward instead and pursue the “green path” and there may be “gold” in your future.


George Benda is Chairman and CEO of Chelsea Group, Ltd, a building sciences consulting firm based in Hawaii. He oversees the company’s consulting efforts in sustainability, which now includes advising owners on how to green more than 125 million square feet of commercial property across the United States, including Hawaii.

Chelsea Group, Ltd. is an Illinois corporation with operations in Chicago, Phoenix, and Honolulu. Executive and administrative functions are based in Maunaloa, Hawaii, The company provides building science consulting services, including engineering, architectural and industrial hygiene expertise, to the owners of commercial and institutional buildings. Chelsea Group assists its clients with improvement programs that put them on the path to sustainability reflected in awards such as U.S. EPA Energy Star and LEED certification. Web site:

John Lewis
Communications Pacific
Topa Financial Center
Fort Street Tower, Penthouse
745 Fort Street
Honolulu, Hawaii 96813
(direct phone line: 1-808-543-3585)
(fax: 1-808-537-6836)

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