Three Bad Habits Already Causing CRE Brokers to Leave Money on the Table as AB 1103 Enforcement Begins January 1, 2014. business brokers orlando florida

California assembly bill 1103 enforcement begins january 1. This new regulation makes energy use a material fact in specified commercial real estate transactions and brings energy efficiency performance transparency to the market – pre-contract, pre-lease or at the time of submitting an application to refinance. The onus for compliance remains with the property owner and as a result commercial real estate brokers have developed 3 bad habits already causing them to leave money on the table in many transactions:

Brokers who have informed and educated their client/owners about AB 1103 believe they have fulfilled their fiduciary requirements – and to an extent they have. However, waiting to disclose energy use per the regulation just prior to agreement is risky especially without knowing the energy efficiency performance of the building.Business brokers orlando florida

low performance revealed too late in the negotiation may result in the potential buyer or potential lessee postponing execution while they decipher the results.

Recommendation: actively discuss energy efficiency performance of a building before, during and after taking a listing and insist the owner undertake the energy benchmarking process early to provide energy efficiency metrics as soon as the building is listed and while the building is listed.

Resource: san diego energy desk conducts regular training for both owners and brokers that digs into the text of the legislation to uncover profitable strategies to integrate AB 1103 compliance opportunities into existing business practices.

AB 1103 makes energy use a material fact in specified real estate transactions and requires disclosure of energy efficiency metrics determined by using energy star® portfolio manager.Business brokers orlando florida the software platform is free to use, but is not easy to use and expertise is achieved only through consistent use over a large and varied number of projects. Relying on an owner to conduct their own benchmarking project or a contractor already serving the building or a managing agent ready managing the building may not result in accurate or objective reporting and therefore creates potential unforeseen liability for the broker when the results inform a sales price or negotiation.

Resource: san diego energy desk is a real estate consultancy with a california real estate broker license and CCIM designation offering fee-based AB 1103 compliance services. As an objective 3 rd party, we are positioned as energy advocate for the owner and our only motivation is timely, accurate and comprehensive reporting based on a consistent methodology from property to portfolio.Business brokers orlando florida

Compliance is the owner’s responsibility and brokers who are waiting for the owner to provide disclosure documents pre-agreement don’t understand the opportunities AB 1103 now presents to better position a property and optimize asset value – in advance of completing a transaction. Savvy brokers are already making recommendations for landscape improvements and lobby renovations in order to optimize asset value and position a property. There are significant levers available in this legislation if brokers understand how the regulations work and the elements of property operations that can impact energy efficiency.

Recommendation: move the focus from one-time compliance to long-term energy efficiency performance. Consider that it takes a full calendar year for energy star® portfolio manager to reflect the full impact of energy efficiency improvements made today.Business brokers orlando florida insist on early and on-going energy efficiency reporting while property is listed and offer on-going recommendations to owner to maintain or improve energy efficiency of the asset.

Resource: san diego energy desk recommends all of our clients implement a robust and on-going energy efficiency performance path well in advance of a compliance transaction. San diego energy desk provides on-going management and monitoring of energy star® portfolio manager accounts on both a property and a portfolio level and can provide real-time AB 1103 compliance reporting.

As brokers and owners wrap up end of year business, it’s time to take a fresh look at the opportunities created by AB 1103 and resolve to overcome these 3 bad habits that may leave money on the table in 2014.