In Landlord Balancing Act, Submetering Is The Secret Tool December 8, 2015 | Zach Aarons

It’s no secret that large commercial and residential buildings consume a vast amount of energy every day. The Environmental Protection Agency estimates 30% of energy consumption in US commercial buildings is actually wasted; meanwhile, the Department of Energy estimates that a simple 10% reduction in commercial building energy consumption would result in $40B collected savings.

With 41% of total US energy consumed by commercial and residential buildings, it is safe to say that, as a country, we are wasting billions of dollars and resources annually.

The Landlord Balancing Act: Space, Payments, & Tenant Satisfaction

When it comes to operating these buildings, landlords have the same priorities and pain points. If all three main priorities are settled, the landlord enters ultimate nirvana:

  • Getting paid on time
  • Creating a beautiful space
  • Keeping tenants happy

However, we don’t live in a perfect world and although everyone tries their best, things are bound to happen: pipes burst, sidewalks crack, tenants miss payments, landlords bill incorrectly.  So, given that we live in an imperfect world, is there a way to use software to make tenant interactions with landlords more frictionless?  


The Basement Tech Revolution

The proliferation of hardware sensors in cellars and sub-cellars of commercial and residential buildings, combined with enterprise software platforms has given rise to the phenomenon that MetaProp NYC calls “Basement Tech.” Now, for the first time, a building owner can deploy solutions that track, predict, and lower building energy consumption in real time.

At MetaProp NYC, we see a lot of new technologies being developed to improve the real estate industry. Companies like Aquicore are at the forefront of submetering consumption and centralizing the data in one complete platform to provide complete transparency and analytics. With submetering hardware and centralized portfolio data, these types of technologies are making landlords’ lives easier and better.

Aquicore’s platform can detect energy consumption anomalies in real time and alert landlords through email or text message immediately. For example, if your office building is unintentionally blasting air conditioning at 2:00 AM on Christmas Eve when it’s cold outside and no one is in the building, Aquicore will alert the facilities manager to shut off that AC unit immediately.

 

Asset Value Improvement With Greater Transparency

By reducing operating expenses, this owner is now actually increasing his or her investment in the property.

Not only does this energy reduction draw less power from the grid and reduce carbon emissions, but it also assists with driving asset value for landlords. Even though cap rates are being compressed to sub-atomic levels, this tool can help a landlord increase value and grow Net Operating Income (NOI) for a portfolio.

While this is certainly not the most glamorous part of real estate, getting paid and keeping tenants happy is arguably the most important part of real estate.  Real estate technology continues to innovate in areas such as leasing, marketing, property management, and financing, but progress in utility billing has been surprisingly slow. 

One of the most exciting things about energy efficiency hardware and software platforms is that they are not a zero sum game. They benefit landlords, tenants, and the environment. Now that’s thinking ahead.

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Energy Efficiency, Tenant Satisfaction

About The Author

Zach Aarons – Co-Founder of MetaProp NYC, Project Manager at Millennium Partners



Zach Aarons is a project manager at Millennium Partners, a leading real estate developer of large scale mixed use projects in America’s key gateway cities. He also serves as the CoFounder of MetaProp NYC, New York’s real estate technology accelerator. Zach is the most active real estate technology angel investor in the United States, funding over 50 startups in the space. Prior to joining Millennium and founding MetaProp NYC, Zach was a Senior Associate at ENIAC Ventures, a seed stage mobile technology fund and the founder of Travelgoat, an online and offline walking tour business. He began his career as an analyst at boutique investment bank Peter J. Solomon Company. Zach currently serves as Treasurer of the Board of Directors of The Lowline and on the Board of Trustees of The Tenement Museum. He graduated Magna Cum Laude with an A.B. from Brown University and earned an MBA from Columbia Business School.