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Learn how SMARTincome by Carbon Lighthouse helps CRE asset managers and financial executives generate ancillary income for their CRE portfolios through Efficiency Dividend generating energy savings measures.
When we say Ancillary income for CRE, we're talking about revenue generated from non-primary sources, which are supplemental to a property's primary income (e.g., rent from tenants). Examples of ancillary income include parking fees, advertising revenue, and shared workspace rentals. These additional income streams can boost a property's overall profitability and enhance its value and resilience in changing market conditions. But, it's also important to choose the right type of ancillary income opportunity. Tenant comfort is extremely important and you don't want to make your tenants feel like they're an opportunity for cash grabs.
Commercial real estate (CRE) owners are constantly looking for ways to increase revenue, especially in fully-occupied buildings with long-term leases. Traditional ancillary income options like billboards, cell phone antennas, and parking garages can provide a boost, but they often have limitations. Carbon Lighthouse's SMARTincome offers a unique solution for generating ancillary income through energy savings measures, creating win-win scenarios for both building owners and tenants.
Efficiency Dividends take tried and true methods from OpEx reduction and combines them with standard accounting practices to unlock OpEx reduction that shares benefits with tenants and provides new recurring net operating income (NOI) to CRE funds, firms and building owners. Efficiency Dividends are essentially financial incentives offered to Building Owners for modernizing their buildings, which in turn lowers energy costs for tenants. As icing on the cake, Efficiency Dividends also allow you to check off sustainability boxes that deliver against LEED, Fitwel, ASHRAE, EnergyStar EUI reduction and all sorts of actual energy reductiongoals.
First, this isn’t a binary either/or decision. There’s no reason you couldn’t do every ancillary income opportunity if you wanted to. But if you only wanted to go with Efficiency Dividends, here’s what you’d get.
SMARTincome by Carbon Lighthouse optimizes a building's energy usage through four tailored energy savings measures, including
By implementing these solutions, CRE owners can generate between $20,000 and $40,000 per 100,000 square feet of additional yearly recurring income. For a medium-sized Medical Office Building CRE portfolio (~10 million square feet of building coverage), Efficiency Dividends can add upwards of $4,000,000 in new recurring income. That’s pretty amazing, if we do say so ourselves.
Here's generally how frequently we identify these opportunties and how much they cost building owners when left unaddressed:
In medical office buildings that are fully leased with long-term tenants, building owners may lack the financial incentive to implement improvements. This can result in increased costs and decreased tenant satisfaction due to old equipment, higher energy bills, and unreliable building conditions. Efficiency Dividends, a key component of SMARTincome, generate new revenue streams through verified energy savings from building improvement projects. This while powerful for Medical Office Buildings, also works well with any building that has a NNN or modified gross lease.
We’ve been working with a LOT of customers on energy OpEx projects for the past 10 years. Many of our customers are now deploying our Efficiency Dividends platform, SMARTincome. Recently, we worked with a publicly traded REIT that deployed Carbon Lighthouse's ancillary income solution across 36 of their buildings. Their goal was to use fast payback projects blended with CapEx projects for rapid cash returns in previously inaccessible Modified Gross leased buildings.
We had initially predicted new recurring efficiency dividends ancillary income of $730,000 per year. After implementing our recommendations, our client increased annual cash flow by $740,000, exceeding our predictions.
What if you could get an internal unlevered IRR of 27%? Sound too good to be true? It’s not. It’s real and we can make this happen for you. Here’s the basics of the financials for a building that spends $80,000 on energy OpEx projects we calculated for a building, that reduced annual OpEx by $30k / year. In this instance, the building owner shared ~$5k in reduced OpEx / year with the tenants.
Carbon Lighthouse's SMARTincome provides a powerful solution for CRE owners looking to generate ancillary income through energy savings measures. By optimizing energy usage and implementing tailored solutions, building owners can create win-win scenarios that benefit both their bottom line and tenant satisfaction. Our combination of cutting edge software, data and professional services can get your portfolio earning millions in new ancillary income starting in less than 90 days.
Schedule a free demo and we’ll show you exactly how Ancillary Income through Efficiency Dividends would work for your specific buildings.
When we say Ancillary income for CRE, we're talking about revenue generated from non-primary sources, which are supplemental to a property's primary income (e.g., rent from tenants). Examples of ancillary income include parking fees, advertising revenue, and shared workspace rentals. These additional income streams can boost a property's overall profitability and enhance its value and resilience in changing market conditions. But, it's also important to choose the right type of ancillary income opportunity. Tenant comfort is extremely important and you don't want to make your tenants feel like they're an opportunity for cash grabs.
Commercial real estate (CRE) owners are constantly looking for ways to increase revenue, especially in fully-occupied buildings with long-term leases. Traditional ancillary income options like billboards, cell phone antennas, and parking garages can provide a boost, but they often have limitations. Carbon Lighthouse's SMARTincome offers a unique solution for generating ancillary income through energy savings measures, creating win-win scenarios for both building owners and tenants.
Efficiency Dividends take tried and true methods from OpEx reduction and combines them with standard accounting practices to unlock OpEx reduction that shares benefits with tenants and provides new recurring net operating income (NOI) to CRE funds, firms and building owners. Efficiency Dividends are essentially financial incentives offered to Building Owners for modernizing their buildings, which in turn lowers energy costs for tenants. As icing on the cake, Efficiency Dividends also allow you to check off sustainability boxes that deliver against LEED, Fitwel, ASHRAE, EnergyStar EUI reduction and all sorts of actual energy reductiongoals.
First, this isn’t a binary either/or decision. There’s no reason you couldn’t do every ancillary income opportunity if you wanted to. But if you only wanted to go with Efficiency Dividends, here’s what you’d get.
SMARTincome by Carbon Lighthouse optimizes a building's energy usage through four tailored energy savings measures, including
By implementing these solutions, CRE owners can generate between $20,000 and $40,000 per 100,000 square feet of additional yearly recurring income. For a medium-sized Medical Office Building CRE portfolio (~10 million square feet of building coverage), Efficiency Dividends can add upwards of $4,000,000 in new recurring income. That’s pretty amazing, if we do say so ourselves.
Here's generally how frequently we identify these opportunties and how much they cost building owners when left unaddressed:
In medical office buildings that are fully leased with long-term tenants, building owners may lack the financial incentive to implement improvements. This can result in increased costs and decreased tenant satisfaction due to old equipment, higher energy bills, and unreliable building conditions. Efficiency Dividends, a key component of SMARTincome, generate new revenue streams through verified energy savings from building improvement projects. This while powerful for Medical Office Buildings, also works well with any building that has a NNN or modified gross lease.
We’ve been working with a LOT of customers on energy OpEx projects for the past 10 years. Many of our customers are now deploying our Efficiency Dividends platform, SMARTincome. Recently, we worked with a publicly traded REIT that deployed Carbon Lighthouse's ancillary income solution across 36 of their buildings. Their goal was to use fast payback projects blended with CapEx projects for rapid cash returns in previously inaccessible Modified Gross leased buildings.
We had initially predicted new recurring efficiency dividends ancillary income of $730,000 per year. After implementing our recommendations, our client increased annual cash flow by $740,000, exceeding our predictions.
What if you could get an internal unlevered IRR of 27%? Sound too good to be true? It’s not. It’s real and we can make this happen for you. Here’s the basics of the financials for a building that spends $80,000 on energy OpEx projects we calculated for a building, that reduced annual OpEx by $30k / year. In this instance, the building owner shared ~$5k in reduced OpEx / year with the tenants.
Carbon Lighthouse's SMARTincome provides a powerful solution for CRE owners looking to generate ancillary income through energy savings measures. By optimizing energy usage and implementing tailored solutions, building owners can create win-win scenarios that benefit both their bottom line and tenant satisfaction. Our combination of cutting edge software, data and professional services can get your portfolio earning millions in new ancillary income starting in less than 90 days.
Schedule a free demo and we’ll show you exactly how Ancillary Income through Efficiency Dividends would work for your specific buildings.