Efficient, intelligent water management is becoming increasingly important for owners of commercial and multi-family residential properties.
From switching to renewable energy sources to weatherproofing their buildings, commercial real estate (CRE) owners have already found a number of ways to simultaneously cut costs and cultivate an image of environmentally-conscious leadership — itself a strong selling point in today’s increasingly green world. There is, however, one significant area where most CRE owners — and most businesses in general — have yet to optimize their operations: water usage.
Steadily rising water costs — driven in large part by increasingly common water shortages in many parts of the country — and the consistently high cost of water-related damage mean that CRE professionals who manage to lead the vanguard of efficient, “intelligent” water management stand to gain a substantial advantage over their competitors almost as soon as they take action.
Skyrocketing Water Bills
Consider this: according to a study conducted by researchers at Michigan State University, the average monthly water bill for American households — currently $120 — will rise by a remarkable $49 over the next five years. This continues a trend that has spanned the entire decade. Indeed, from 2010 to 2015, the average household’s water bill rose by 41%, and 2016 alone saw increases of, on average, 4%.
These hikes were even more pronounced in areas where water scarcity is a significant concern. In Los Angeles, for instance, the average monthly water bill for a household using 150 gallons of water per person per day grew steadily from $99.07 in 2010 to $127.51 in 2016, only to jump all the way up to $161.76 this year. In San Francisco, the average monthly bill more than doubled from $86.31 in 2010 to $195.86 this year.
For comparison, as the cost of water increased by 6% nationwide between 2014 and 2015, the consumer price index — excluding the hyper-volatile food and energy sectors — increased by a mere 1.8%, and average electricity rates rose by only 1.2%.
The Impact of Better Water Management in CRE
For businesses, these substantial price increases have thrust water management to the fore, so much so that, according to a report from the Pacific Institute, “Water is no longer a peripheral business concern, but an essential aspect of business strategy.” The Institute’s research suggests that 57% of companies expect water issues to both factor into their growth decisions and threaten their profitability by 2018, and that water challenges present the most immediate natural resource risk to businesses — more than energy security, climate change, and others.
In the CRE sector, such concerns are certainly understandable, and often even more pressing. The Environmental Protection Agency estimates that 20% of the water distributed to commercial and residential properties is lost through small leaks and other similar inefficiencies. Multiplied across an entire CRE portfolio, these losses can add up quickly.
In addition to bill reduction, eliminating these leaks and inefficiencies improves property damage mitigation (and, consequently, reduces insurance policy rates), increases an asset’s value by laying the groundwork for green building certifications, and ensures compliance with almost any water conservation regulation. Over time, this leads to overall operational cost reductions, makes properties more attractive to tenants by driving down rents, and increases property value for potential investors.
Moving Toward Water Intelligence
Until recently, water management at large commercial or multi-family residential properties has been fairly rudimentary, focusing primarily on bill aggregation and leak-recognition via threshold analysis. These techniques enable property managers to diagnose whether there is a major leak (although typically with some delay), but does not enable them to identify where the leak is.
Automatic meter reading (AMR) can help facilitate communication between a water meter and a reading device and advanced metering infrastructure (AMI) allows two-way communication among an entire network of endpoints across a water system, but neither approach provides CRE owners with true “water intelligence.”
WINT, on the other hand, offers owners and property managers an intelligent, Internet of Things-enabled water management solution that not only provides real-time system readings, but also showcases advanced predictive analytics and critical reports on fixture consumption, leaks, and more. The WINT solution provides owners with a hands-on operational dashboard with a comprehensive view of a property’s water usage as well as the ability to remotely — or, if you prefer, automatically — shut off water in cases of emergency.
Ultimately, better, more intelligent water management will be a decisive factor in determining winners and losers in the already hyper-competitive CRE world in the years to come.