LOMBARD, Ill.--(BUSINESS WIRE)--In a white paper released today, leading multifamily energy services company American Utility Management (AUM) explains how multifamily property owners can reduce energy use and cut operating costs by benchmarking utility usage against a qualified pool of comparable properties. The white paper, which is now available for download, shares the results of a benchmarking statistical study conceived by AUM and conducted in collaboration with Georgia Tech.
Using AUM’s data, Georgia Tech developed a mathematical algorithm which compares and contrasts multifamily properties, ultimately allowing owners to identify cost savings. The algorithm takes into account a wide range of variables unique to this property class, including such nuances as common space, size of swimming pools and other high-intensity energy amenities, geography, climate, and even a property’s orientation to direct sunlight.
“Until now, comparing multifamily properties in order to establish benchmarks and identify best practices to reduce energy use was impossible because of the complexity and differences between properties,” says Michael Miller, President and CEO of AUM. “Using AUM property information and actual utility data, the researchers at Georgia Tech helped us to create a way for owners to draw peer-to-peer comparisons between properties, which give them deep insight into how they are operating against standard. Benchmarking is a vital first step in reducing energy and utility costs. We conducted this study to prove that there is an effective way to create benchmarks that can be used to better manage properties, reduce operating costs, enhance asset value, and increase ROI, while reducing utility consumption and maintaining a greener property.”
According to AUM, the multifamily industry spends over $53.5 billion a year on energy. Additionally, the EPA reports that utility costs represent the single largest controllable cost in an apartment community—typically accounting for 25 to 35 percent. Moreover, reducing energy use by 15 percent in a typical 250-unit master-metered community will increase net operating income, and increase asset value by over $1 million (using a 6 percent capitalization rate).
“The joint study validates the AUM model for energy and water benchmarking,” says Baabak Ashuri, PhD, Director of the Economics of the Sustainable Built Environment Lab in Georgia Tech’s School of Building Construction. “We view it as a valid new voice that will have positive reverberations throughout the multifamily sector, helping asset owners, managers, and investors see stronger returns while increasing sustainability.”
Energy savings represent the greatest possible opportunity for multifamily property owners to reduce costs at time of tremendous stress in the real estate industry.
“The challenge to achieving cost savings has always been difficult when comparing various types of multifamily properties in order to establish operating benchmarks. This study shows that by using AUM technology we now have the ability to develop peer-to-peer benchmarks that show where multifamily properties can reduce operating costs,” says AUM’s Miller.
The study used Data Envelopment Analysis (DEA) methodology to develop a benchmarking model for energy and water efficiency. Properties in the population are relatively ranked in this benchmarking approach and each property receives a relative efficiency score, with the most energy-efficient receiving 100 percent as their relative efficiency score. The scores of remaining properties are specified in direct comparison with respective peer properties with scores of 100 percent to determine sustainability.
“This study provides strong evidence that the multifamily industry can do much to reduce energy and utility consumption, which simultaneously improves sustainability while driving down costs, and ultimately saving money for both owners and residents,” continues Miller.
The company used this information in the development and implementation of AUMScore, a multifamily energy benchmarking tool that will enable property owners to compare their properties’ energy usage across their own portfolios and across the multifamily industry. The tool helps owners drastically reduce their energy expenses and consumption by benchmarking energy use within a portfolio using continuously updated information from similar peer properties.
For more information on AUMScore or for a copy of the white paper, contact Leigh Sperun at firstname.lastname@example.org or at (610) 228-2108.
About American Utility Management
Founded in 1994, American Utility Management (AUM) provides comprehensive energy services to the multifamily industry. The company prides itself on driving bottom line savings for its clients through its energy management, invoice processing, and resident services. AUM uses its proprietary technology and data to create custom energy solutions that allow multifamily management to lower their energy usage and save money. The company distinguishes itself through its knowledgeable and experienced professionals who provide all services in-house without outsourcing to other companies. AUM advises energy management of over 500,000 multifamily units across the U.S. For more information on AUM, please visit www.aum-inc.com or call 800-418-5393.