Energy Benchmarking and Disclosure for Commercial Property: New State and Local Mandates

Most major U.S. cities now mandate energy usage disclosure and benchmarking for commercial properties. In Atlanta, Austin, Boston, Chicago, Denver, Kansas City, Los Angeles, Minneapolis, New York City, Orlando, Philadelphia, Pittsburgh, Portland ME, Portland OR, Salt Lake City, San Francisco, Seattle, St. Louis and Washington, D.C., building operators must report energy usage that will be compared against similarly situated buildings. A few states require reporting statewide.

To facilitate these reporting efforts, the EPA created ENERGY STAR©, which allows building owners and operators to measure and record energy use data online through the Portfolio Manager system. Currently, about 40% of total commercial building space nationwide utilizes Portfolio Manager for measuring energy efficiency. Better efficiency ratings have been shown to result in higher occupancy, rental rates and resale value.

Counsel must have a thorough understanding of Portfolio Manager and local disclosure requirements when advising developers and operators of commercial real estate. Counsel should consider the extent to which sales contracts, leases, construction contracts and property management agreements should address benchmarking and reporting requirements going forward.

Listen as our authoritative panel discusses the current movement toward local energy usage benchmarking, and implications for building developers and operators in those cities and states with reporting mandates. The panel will also examine the impact of benchmarking on purchase and sale transactions, leases, construction contracts and property management agreements.

1. Evolving approaches to energy efficiency in commercial buildings—LEED construction, renewable energy
2. Benchmarking—where mandates are in place, typical reporting regimes
3. Utilizing EnergyStar and Portfolio Manager
4. Impact of benchmarking on construction and operation of commercial property
5. Suggested reporting and benchmarking provisions for leases, sales contracts, management agreements, construction contracts

The panel will review these and other crucial issues:

• What is benchmarking, and why has it become an issue for developers and operators of commercial buildings in major metropolitan areas?
• What are the mechanics of energy usage reporting under the EPA’s Portfolio Manager system, and who is responsible?
• How might construction or renovation plans be affected by benchmarking mandates?
• How should counsel address benchmarking mandates in leases, sales agreements, and property management agreements?