Why Building Owners Should Review The Business Case For Facility Optimization

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Executive Summary

Costs associated with managing real estate portfolios are often handled individually. For example, energy management may initially be approached as a way to reduce utility costs only. Similarly, building owners try to squeeze outsourced facility management contracts for savings. When handled in isolation, these strategies will limit the amount of achievable cost savings – leaving money on the table. Recent facility management advances have sought to optimize facilities more broadly, creating larger pools of costs to manage down. This Verdantix report investigates the potential savings that can be derived from facility optimization and why the default reaction of ‘squeeze facility management contracts’ may be counterproductive to achieving the largest savings possible.

Table of contents

Why Building Owners Should Review The Business Case For Facility Optimization
Real Estate OPEX Cost Reduction Opportunities Are Concentrated Across A Few Categories
Legacy Facility Management Strategies Limit Potential Cost Savings
Facilities Optimization Opens Up Untapped Savings For Building Owners
Facility Optimization Management (FOM) Strategies Need Technology Applications To Bring The Required Data And Control Capabilities

Table of figures

Figure 1. Five Categories Comprise Over Three-Quarters Of Real Estate OPEX Budgets
Figure 2. More Progressive Saving Strategies Result In Higher Potential Savings

About the author

Derrek Clarke

Senior Analyst

Derrek is a Senior Analyst in the Verdantix Smart Buildings Practice. He conducts Verdantix research on energy management and the optimization of building systems covering technologies, best practices and growth strategies. His current agenda is focused on establishing facility optimization software as a distinct category of technology investment. Derrek has ten years of experience as a licensed architect. He joined Verdantix in 2014 and previously worked at global architecture and engineering firm HOK. Derrek holds a Masters in Architecture from Parsons and a Masters in Sustainability Management from Columbia University.

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