With budget season looming, now is a great time to get organized and develop a strategy that is responsive to your tenant needs and the financial goals of ownership. In working with hundreds of property teams across the country, we have identified the following common strategies that will help you stay ahead of the curve during budget season.

Listen to your tenants
Review the results of your annual tenant survey and prioritize projects that will improve tenant satisfaction and retention. For example, if tenants are concerned about low lighting levels in the parking garage, propose the installation of LED lighting fixtures to improve lighting quality and reduce ongoing energy and maintenance costs. If tenant spaces are “stuffy,” investigate opportunities to enhance the control of your building's ventilation system.

Look beyond capital-intensive projects
Incorporate low-cost operational improvement opportunities into your capital budget. Consider engaging an operations professional to dig deep and identify opportunities to close the operational performance gap by reducing energy and water waste. As a starting point, consider the following opportunities:

Operational Improvements with Quick Returns
(Payback periods typically less than one year)

  • Adjust equipment operating schedules to align with standard tenant lease hours
  • Optimize air- and water-side economizers during the “shoulder” months
  • Program enhanced control sequences into the building automation system (BAS)
  • Control air leakage from openings in the building envelope (i.e., HVAC ducts, penetrations, and doors) to reduce the building stack effect
  • Enhance HVAC equipment maintenance practices to improve system efficiency (i.e., cleaning AHU coils, repairing leaking valves, etc.)
  • Replace existing incandescent or outdated fluorescent lamps (i.e., T8/T12 tubes) with higher efficiency LED or fluorescent lamps, rather than wholesale fixture replacements
  • Install lighting controls, such as occupancy sensors for interior spaces and photometric controls for exterior lighting
  • Install low-flow aerators on lavatory faucets and low-flush valves on toilets and urinals

Meet with your utility account representative

As you are developing a list of projects to propose for your budget, schedule a meeting with your utility account representative to align available utility incentives with your projects. Inquire into upcoming utility programs that you can leverage for future projects. Ask your utility representative if program funding is typically available throughout the year or if funding is limited, as you may need to plan your project implementation schedule around program funding cycles. Before parting ways, schedule your next meeting so that you can stay apprised of program funding levels and new opportunities.

Ensure competitive pricing
Coordinate with your engineering team or an operations professional to develop a detailed scope of work for each project. Request a minimum of three proposals for each project, as project costs can often vary by more than 200% among contractors for the same project. When requesting proposals, provide your project scope of work and ask contractors to:

  • Separate their product/material and labor costs
  • Provide detailed savings calculations with assumptions
  • Incorporate available utility incentives into their costs and facilitate the utility incentive application process
  • Provide references for similar projects

Providing clear direction to contractors will result in an apples-to-apples comparison of services and costs, minimize time spent clarifying proposal details, and ensure competitive pricing is received.

Leverage your peer network
Reach out to your colleagues and peers (i.e., through BOMAIREMIFMA, and other organizations) who have implemented similar projects at their properties. Discuss their experience working with local contractors and lessons learned to avoid potential complications down the road.

Present the business case and value-add
When developing your budget, include the estimated savings and ROI/payback period for each project to demonstrate the business case. Coordinate with your Chief Engineer to review the project details so that you both can clearly communicate the value-add to ownership. Invite your Chief Engineer to participate in the budget review meeting with ownership to help present the projects. This will show that your team has bench strength and is cohesive and collaborative.