Case Studies
Commercial Real Estate
Gotham 360 Helps Real Estate Investment Trust
Reduce Energy Costs and Track Data Online
When you need to supply energy to Millions of square feet of commercial real estate, controlling costs is critical. Gotham 360 worked with the client to not only obtain improved supply contracts and drastically reduce their energy spend, but also gave them a web-based solution to monitor usage and billing statistics for targeted decision making.
The Client is a national Real Estate Investment Trust (REIT) with 18.6 Million square feet of commercial real estate in the Mid-Atlantic region of the U.S. With an annual energy spend of $87 Million, they needed help with procurement advisement across their portfolio to reduce costs and monitor usage.
The Challenge to secure competitive energy supply contracts for over 120 properties led the REIT to seek Gotham 360’s assistance in several areas. After discussing the client’s goals, Gotham 360 developed a thorough plan of action to:
◄ help the REIT evaluate their risk profile and energy management objectives
◄ match those objectives with appropriate products
◄ educate the client on dynamics and options in different markets
◄ develop hedge plans for each geographic market
◄ facilitate web-based energy reporting (“The Dashboard”)
◄ secure low cost energy contracts under favorable terms and conditions
◄ provide client with advanced budget and ongoing forecasting support
The Solution started with Gotham 360 identifying the REIT’s risk tolerance and overall corporate energy management goals. With the objectives of the client defined, Gotham 360 dug into the task of finding the most competitive energy suppliers to achieve substantial cost savings. Gotham 360 worked on behalf of the client to:
◄ gather historical account information for each property
◄ identify suppliers interested in bidding
◄ serve as liaison between the client and eligible suppliers
◄ solicit rounds of competitive bids from suppliers
◄ negotiate contract terms with “short-listed” suppliers
◄ lead discussions about market dynamics and timing of contract execution
Now that the relative information was in and suppliers were short listed, Gotham 360 helped the REIT evaluate the “best and final” bids and facilitated contract execution.
After securing competitive supply contracts, Gotham 360 worked with the suppliers to outline the billing data flow to Gotham 360’s client services group. Once the billing process was defined, Gotham 360 set the client up with a special online dashboard reporting system and personally trained them how to easily view their energy usage and billing data.
To assure the client’s continued success, Gotham 360 also leveraged the client’s historical data to derive detailed budget and forecast data for energy use throughout 2009. Throughout the term of the client’s supply contracts, Gotham 360 has provided continuing market analysis and hedge strategy support.
The Results of Gotham 360’s involvement allow the client to enjoy an energy savings of approximately 25% below current market prices as of September 2008. In addition, the benefit of being able to view billing and usage data for all properties online resulted in improved accountability and engagement of property managers. With the help of Gotham 360, the client now has solid tools for improved decision making for their energy efficiency investment. |