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Office real estate one year after the start of the COVID-19 pandemic | Maryland Commercial PACE

COVID-19 emptied Blatimore's offices; now they are refilling.

 

FOR IMMEDIATE RELEASE

March 29, 2021

 

As Q1 of 2021 draws to a close and the nation collectively recognizes the anniversary of work-to-home shift created by the COVID-19 pandemic, many businesses and commercial property owners wonder when normalcy will reassume. Since March of last year, analysts and industry experts tracked the unexpected fallout from so much of the United States workforce laboring from their homes. Results are positive: through flexibility, creativity, and perseverance, American businesses are steadily recovering from the sudden economic shock that COVID-19 represented.

 

A market segment greatly affected by COVID-19 was and continues to be commercial real estate. Though there may be uncertainty in the future of office real estate, some experts in the field believe that the way forward is to focus on changing the dynamics of cost through improving energy efficiency. A brief published in 2020 by the Urban Land Institute (ULI), Building Owners and Managers of America (BOMA), and the Rocky Mountain Institute makes just this argument. In this prescriptive and useful informational tool, the authors highlight the benefits of energy efficiency to the class B/C office real estate segment and explain how the benefits of increasing energy efficiency continue to be just out of reach for many property owners.

 

The authors attribute the lack of progress to deficiencies in three areas: information, resources, and finances. The first obstacle, information, is due to the lack of expertise many owners of office real estate have in the field of energy efficiency and clean energy contracting. Simply put, many office building owners consider utility costs as inconsequential or immutable operational costs. The second obstacle stated by the authors is an issue of insufficient resources needed to adequately access energy efficiency improves; an example of this is personnel hours. Finally, the barrier of cost to the property owner can result in an inability to invest in the property even with the circumvention of the prior two obstacles.

 

With the greater attention being paid to focusing on net operating income and limiting loss, energy efficiency is starting to get more attention. With many property owners interested in this once underappreciated performance measurement, barriers of information and resource availability are shrinking. However, the final and most important barrier of cost can still present difficulties. A solution to this financing quandary that is available in many areas is Commercial property assessed clean energy financing.

 

In 2020, the MD-PACE program facilitated financing for an unprecedented number of projects. One example was an office building in Hanover, Maryland that used C-PACE to finance improvements with a goal to approach net-zero performance. The Hanover C-PACE project accessed $3.7 million of C-PACE to finance a wide array of clean energy, energy storage, and efficiency improvements. The improvements financed in this project are expected to result in nearly $200,000 of savings annually and achieve a return of 1.77 times the investment.

 

The MD-PACE program encourages all commercial property owners and developers with interest in accessing C-PACE financing or investing in high-efficiency improvements to contact info@pacefinancialservicing.com.

 

 

About the MD-PACE Program

The MD-PACE Program is sponsored by the Maryland Clean Energy Center (MCEC), a corporate instrumentality of the state of Maryland which advances the adoption of clean energy, energy efficiency products, services and technologies. MCEC leverages private capital to help homeowners, businesses, and government entities reduce energy costs. The MD-PACE program offers C-PACE financing to commercial property owners statewide.

 

Photo by Grace Dadson on Unsplash