How do you make your valuation analysis sustainable and energy efficient?

Let's face it, carbon & capital have become inextricably linked. Regulators are moving at break-neck speeds to force asset owners to improve the sustainability of their assets. Just to provide some context, The Real Estate Board of New York (REBNY) has sounded the alarm on a pressing issue affecting over 3,000 buildings, including around 2,000 apartment complexes, in the city. The potential fallout? An astounding $200 million in annual fines, commencing next year, due to non-compliance with the stringent Local Law 97. These are astonishing numbers and have very real consequences. Stakeholders must realize that there is a cost related to non-conformance. The cost is steep. Don't eat the proverbial Elephant all at once, BUT start eating!

We periodically send a resident letter about conserving water. This has been especially helpful on our larger apartment complexes where the water is on master meter. We explain to residents that as managers we try to keep rents as low as possible to run sound operations and one way they can help is by being conscious of their water usage and conserving water where ever they can. Residents don't like their rents going up and this is one way they can connect the cost of operations to water conservation and play a part in being cognizant of their water waste.

ESGs are important aspect apart from financial contributers. Real Estate is currently facing lot of environmental challenges which are to be addressed ,coped up with and adapted along with nature .Importanace of green buildings and reduction of carbon foot prints are very essential.Series of risks particularly natural disasters are to be handled. Social awareness of human rights ,equality, equal opportunities play a key role in the business. Affordable housing for creating faster buying opportunities and grossing investments.Currently ,properly managed facilities,secured campuses are searched. Finally, Governanace has to be sincerely controlled, fair prices for the customer, control corruptions and leakages are to be dealt.

Depending on the size and type of building you will address the E, the S and the G. Going for the certification is also investing in your building, your tenants and long term goals. If you have multiple buildings, the lessons learned can be applied for your other buildings as well.

Implementation and effectiveness of E S G would be different in the project size , stage and the complexities. The track record and the techniques may vary as well ,however the performance needs to be tracked and challenges addressed . This will certainly support on the building framework for effective and constant performance.

In the beginning the project looks overwhelming but start small and implement step by step parts of ESG and incorporate them with the existing goals. GHG goals, capital goals. There are a lot of tools, information available to help you achieve this process.

Having an ESG plan is a tremendous benefit for the internal and external stakeholders. With one common goal, it's easier to go for the same values. A building is more than just a building. It's a functional place where people live, work, do projects. With the ESG label, people know what to expect.

E S G has to be implemented for all the stakeholders and every one should be contributors. Might be it would be slow response at first but it will gradually built and show the increased performance. It has to be collaborative approach for all. Also , proper communication of the polices such as why it is implemented are necessary for providing Clarity.

The $570bn semi-conductor industry is set to grow even further, with Hyperscale data centres (operated principally by the mega-techs) to double in next 10 years + the AI chip market to go from $8bn (2020) to $195bn to 2030. We are seeing the leading real estate companies in market identify the security of supply (+ cost) be a key consideration for their digital strategies rollout - particularly with the greater focus on Scope 3 + the roll out of tech -dependent strategies. I suspect given recent telco outages, this will have risen even higher in priority. Our ability at The Proptech Connection is to help our clients be aware of the key areas to consider when delivering digital strategies - much of this is centred on risks and learnings.

Tips: - Start sooner than later - Don't reinvent the wheel. Learn from the people who have it already in place - Don't see this only as a cost. Well implement saves money, makes the property more valuable - Use already what you have and add the missing parts. Too much change is hard to implement.