Unlocking Energy Efficiency and Cost Savings in Commercial Real Estate

For commercial real estate (CRE) firms, investors and tenants today are placing growing value on eco-friendly buildings. That means CRE groups need to do more than just set energy conversation and decarbonization goals – instead, they need to back their efforts with accurate and reliable data to ensure success.  

Energy performance directly impacts a building’s marketability, valuation, and long-term profitability. But achieving meaningful progress requires more than ambition. It demands clear visibility into energy usage, equipment performance, and emissions data across the portfolio. 

Unfortunately, that visibility can be hard to come by. In this blog, we’ll explore the hurdles facing CRE organizations and offer insights into how they can overcome these challenges to unlock energy efficiency and significant cost savings.  

The power of data in driving energy efficiency 

It’s no secret that data is the foundation for smarter energy management decisions. Sustainability efforts and green initiatives are most likely to be successful when they are grounded in actionable intelligence.  

CRE firms today have the tools at their disposal to leverage a range of insights – from utility consumption and emissions tracking to equipment-level data – to help spot inefficiencies and identify opportunities for improvement across their portfolio. But challenges still persist.  

Fragmented systems, limited real-time visibility, and inconsistent data quality often stand in the way of progress. That’s why it’s important for CRE organizations to have a centralized platform that can consolidate and standardize data across multiple buildings, regions, and teams. When implemented and used effectively, these systems can provide the data necessary to reduce energy usage, lower operating costs, and improve ESG performance.  

When paired with more advanced technology like IoT sensors and predictive analytics, CRE organizations can get even further ahead of maintenance needs and ultimately deliver a more efficient and responsive tenant experience. 

Overcoming barriers to implementation 

Despite the effectiveness of these systems, poor implementation can prevent organizations from utilizing them to achieve their sustainability and energy management goals.    

In some cases, there is a disconnect between sustainability ambitions and the financial appetite to support them. Even today, many CRE firms are still navigating the financial ripple effects of the COVID pandemic and struggling with high vacancy rates. This means still grappling with reduced budgets and tighter margins, making it difficult to justify large capital investments even when the long-term ROI is fairly clear.  

Equally challenging are the organizational silos that can slow down progress. Often, asset managers, building engineers, ESG leaders, and finance teams operate in isolation, each with their own priorities, tools, and timelines. This leads to misaligned incentives, unclear ownership of key metrics, and a lack of communication. 

Without coordinated goals or shared data between these teams, sustainability and energy management initiatives can easily stall before they ever gain traction.  

Even in situations where firms have strong cross-departmental communication channels and access to rich datasets, a lack of capacity or organizational alignment to translate that data into action can stall progress. Without a centralized view or a clear governance structure, opportunities for efficiency and cost savings simply go unnoticed. 

Strategies for success 

Barriers like those mentioned above can slow down progress for even the most well-intentioned CRE organizations. Fortunately, there are ways organizations can alleviate these concerns and find success with their energy management goals.  

• Start with the lowest-hanging fruit: Whether it’s lighting upgrades or a simple HVAC tuning, focusing on making small changes first can drive quick wins and give you momentum to progress other initiatives. 
• Align sustainability with strategic organizational goals: Sustainability should be embedded into your portfolio strategies, not simply bolted on. Leverage data you collect to justify investment needs and answer questions like, “How does this reduce operational risk? Improve tenant value? Increase asset performance?”
• Use data to tell compelling stories: When CRE teams use dashboards and reports to communicate the financial and environmental benefits of sustainability, it's easier to get alignment across all key departments and stakeholders, from C-suite executives to consumers and investors. 

The future of energy management 

Energy management and financial strategy are becoming increasingly intertwined in the commercial real estate industry. As technology continues to evolve, CRE firms will be expected to make smarter, faster decisions, with AI likely to be at the center of that shift.  

From forecasting energy demand to detecting system anomalies and automating work orders or making real-time adjustments, AI and automation can transform how buildings are managed to improve efficiency and performance. 

At the same time, sustainability metrics are no longer confined to standalone ESG reports. They’re becoming embedded in the core of financial reporting, as investors now expect transparency into how climate risks and energy costs affect long-term asset value. This evolution is prompting CRE firms to strengthen their internal systems, ensuring environmental performance is tracked with the same rigor as financial KPIs. 

With climate-related disclosures gaining traction across global markets, CRE organizations are facing growing pressure to report openly on emissions, energy performance, and the physical risks associated with climate change. Companies who embrace this shift will be best positioned to build trust, attract capital, and drive long-term resilience for their portfolios.  

Conclusion 

For commercial real estate firms, strategic energy management is an essential driver of financial performance, tenant satisfaction, and long-term resilience. But the path won’t always be easy. From fragmented systems to budget constraints and siloed teams, CRE organizations face real barriers to turning ambition into action. 

Fortunately, with the right data strategy and tools in place, these challenges can be easily overcome by empowering teams with clear, actionable insights. This can unlock big energy savings and position companies as leaders in an increasingly climate-conscious market. 

Recently, we held a sustainability and energy management webinar with experts from the commercial real estate industry. The panel discussed ways to use data for decarbonization efforts on best practices for long-term financial viability of sustainability initiatives.  

Click here to watch the full on-demand recording.  

Or download our Simplifying Sustainability guide for tips on breaking down your sustainability goals into manageable steps that drive efficiency, save costs, and align with regulatory expectations.