There is a Perfect Storm brewing that will put pressure on the bottom line for most buildings. Recent negative trends for buildings with retail stores include the “Shop Until You Drop” syndrome. Shoppers are moving away from the pounding the sidewalk to pounding a keyboard and checking out with a “Click” instead of a “Card Swipe” at a local store.
Real Estate Taxes? Get ready for some sticker shock numbers and don’t forget to have your Tax Certiorari’s number at the ready. Now you need to add a newcomer to the list – your electric rates. Rates are about to increase in a big way. Why? Indian Point is shutting down and with it goes cheap power about to be replaced with not-so cheap power. Taxes up, rents down and utilities up – not a good story for any building – commercial or residential, hence a Perfect Storm.
Do not allow your building’s bottom line to be blind-sided by these negative trends. Develop strategies to minimize the negative impact of building expense increases. Focus on remedial steps with a high probability of success that can be duplicated across multiple buildings.
First address increases in Real Estate Taxes. Peter Blond, Esq. of Brandt, Steinberg, Lewis & Blond, LLP advises that the Notices of Property Value are normally mailed out to property owners in mid-January. Then there is limited period of time to file a protest. For most buildings, the tax protest filing period will close on March 1, 2017. This Notice of Property Value will determine the amount of taxes due in the upcoming the tax bill – July 1, 2017. In terms of addressing (protesting) any assessment increases quickly – very quickly – engage a Tax Certiorari. Traditionally these firms charge based on their success, so interests are aligned.
Next address the imminent increase in Con Ed electric rates. With the two Indian Point reactors scheduled to cease operations in 2019/2020 and no inexpensive replacement power “identified” (translation – not available), rates are going to rise – without question. Now is the time to offset these rate increases by introducing energy saving measures. Go to the recently issued report entitled “New York City’s Energy and Water Use 2013 Report”. This Report includes proven Energy Saving measures along with investment payback periods. Two of the measures included are both foolproof and have quick two year paybacks. These measures include: 1) Stand-alone hot water production, and 2) Upgrading to LED lighting.
Stand-alone hot water production is efficient and will save on both fuel and electric. The savings will result in a two year payback in terms of covering the overall cost of the project. This measure will also allow the building boiler to rest off-season. Allowing a boiler to rest will result in less boiler maintenance and a longer useful boiler life.
As for LED upgrades, any buildings utilizing fluorescent or incandescent lighting are good candidates for LED upgrades. In terms of payback periods, buildings with a combination of both incandescents and fluorescents will usually have a payback in about one year while buildings with only fluorescents will be in the two year range. Note as well that Con Ed has just updated its incentive funding programs for LED retro-fits for both multifamily and commercial buildings (including funding for smaller commercial buildings – previously not available). Work with a Con Ed Market Partner to access these funding rebates.
For more information regarding energy saving measures to protect the bottom line of your building go to WWW.GreenPartnersNY.Com to access more articles on energy savings measures.
Article written by George Crawford – WWW.GreenPartnersNY.com