retail

Energizing mixed retail space

How to manage utilities to gain a competitive advantage
Thursday, January 4, 2018
By Scott Beneteau

Increased urbanization and the demand for convenience has made it more common for retailers, restaurants and office spaces to operate under one roof in mixed retail spaces. With multiple tenants who have varying utility needs, there’s difficulty in ensuring fair allotment of energy costs. However, for savvy property managers this is also an opportunity to differentiate their buildings from the competition through effective utility management that often leads to more attractive rental rates and a reputation built on reliable service.

The varying needs of mixed retail spaces

Selecting HVAC and hydronic equipment based on business type is critical for success in retail applications. The size of the space and how it will be used can impact the set-up of equipment. For example, event spaces, restaurants and new technologies in mixed retail spaces all impact HVAC systems in different ways.

HVAC needs for restaurants go beyond those of the average tenant. Restaurants have a constant need for fresh air, which is especially important with the growing trend towards open concept kitchens. To maintain fresh air in a restaurant, large exhaust fans are required to properly deliver make-up air that can’t be handled through a conventional heating and cooling system. Restaurants also use considerably more hot water than other tenants and require more space for larger capacity water heating equipment.

Another trend in retail spaces is the use of electronic displays and even screen walls. While factoring large digital displays into HVAC system design may not seem important, these digital displays may actually release a significant amount of heat that is vented into the space. Designing an HVAC system to account for this exhaust heat can help improve guest comfort and prevent display overheating.

When designing a space, whether it be a restaurant, office or retail store, it’s critical to think about the HVAC system as part of the design process. Planning the design elements ahead of time to accommodate and optimize heating, cooling, air ventilation and electrical requirements will ensure a comfortable space for patrons and a better customer experience.

Work with tenants for better utility management

When it comes to maintaining HVAC systems, regular maintenance and equipment inspections ensure better energy performance, air flow and overall comfort. Regular servicing keeps equipment in optimal condition so it doesn’t have to work as hard, minimizing breakdowns and emergency repairs, while extending the useful life of HVAC equipment. Without preventative maintenance, equipment is at a much higher risk of breaking down during high seasons, an unwelcome disruption for businesses.

Part of improving energy management and operations involves encouraging operators and building occupants to consider and be mindful of energy conservation. This can be done through seasonal checklists, periodic review of operational procedures, training seminars and reward programs based on utility benchmarks.

Building education and awareness around energy management is an important step for property managers and landlords, especially in a mixed retail environment where tenants may range quite drastically in utility use. For example, a grocery store uses 3.5 times more energy than an office. If property managers and landlords understand the varying levels of utility usage, the benefits of investing in better utility management become clear and they are able to make more informed energy management decisions.

To understand where energy is going and to identify pattern changes to spot problems early, continuous monitoring energy management is an important strategy. Through collection and analysis of key building systems performance data, property managers can do data-driven maintenance planning, verify that savings from capital investments are sustained over time and use trend analysis to improve utility cost budgeting and capital usage.

Finally, sub-metering and billing allows for better allocation of utility costs, collection of building utility usage insights and often results in positive behavioural changes with respect to utility usage. In multi-unit retail buildings, it’s important to remember that not all retail tenants use the same amount of energy. Sub-metering is a way to allocate utility costs fairly.

Achieving better energy management through sub-metering

Traditionally, utility costs in mixed retail spaces are allocated on a per square-foot basis. Sub-metering is an option that allows for more accurate utility usage allocation through direct tenant billing or allocation of rent charges that are supported by meter data.

If a building has similar tenant businesses, comparable utility consumption or no exceptionally heavy utility users, sub-metering may not be necessary. However, sub-metering provides a great benefit to buildings where tenants represent a wide variety of businesses and are using significantly different amounts of electricity, water or gas.

Finding the right sub-metering solution

Some things to consider before implementing a sub-metering program are existing lease terms, building infrastructure, installation costs and service/billing costs. Ideally, each tenant would be sub-metered by one (or more) meters for the most accurate and fair measurement of utility usage. This type of retrofit requires a high initial capital investment, and tenants must be prepared for a period of down-time during installation.

Alternatively, to reduce initial costs and interruptions, there’s the option to sub-meter only the large user(s) and allocate utilities by square foot for the other tenants. There’s also the option to implement sub-metering during tenant turnover, allowing the cost of meter installation to be included as part of the tenant fit out. In this scenario, the rest of the tenants would be pro-rated by square-foot for the remainder of the utility costs. The goal over time would be to fully switch all units to sub-metering as tenants change over.

The important thing to remember when exploring HVAC options to achieve operational efficiencies in a mixed retail space is to take into consideration the property, tenants and their various needs. The more information available regarding utility usage, the more potential opportunities there are to improve operations and find cost-saving efficiencies.

 

Scott Beneteau is General Manager for Enercare Commercial Services, a leading provider of HVAC solutions for the restaurant and foodservice industry. Scott brings 15 years of experience as a trusted partner to organizations across a variety of sectors on issues including energy management and HVAC systems. Scott can be reached at [email protected]. For more information about Enercare Commercial Services, visit https://www.enercare.ca/commercial.

 

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