An Industry-Wide Focus on ESG  

In recent years, leading companies across the commercial real estate industry have increased their ESG efforts to improve the sustainable operation of buildings amidst a worsening climate crisis and a related rise in climate risks. Specifically within the multifamily sector, the demand for innovative, sustainable new technologies has been strong, and this demand was part of the impetus for the  launch RET Ventures’ own ‘Housing Impact Fund’ — an ESG-centric vehicle investing exclusively in solutions that address environmental and social performance pain points for multifamily assets. 

Real estate stakeholders have been pushing for more sustainable buildings for a range of reasons, including climate responsibility and reduced operating costs. But emerging federal and regional legislation — such as the Inflation Reduction Act and New York City’s local Law 97 — have quickly created another major incentive. Through these and other laws, the government is introducing new capital, major tax incentives, and stricter reporting guidelines to the commercial real estate sector and raising the potential ROI on sustainable investments for multifamily assets. Coupling this regulatory landscape with strong demand from investors and tenants alike, a strategy for stronger ESG performance and greener building operations will be necessary for any asset hoping to hold long-term value in the market. 

AI-Powered Technology for Real-Time Optimization    

As the demand, risks and opportunities surrounding sustainable operations in the multifamily sector have been heightened, apartment owners and operators are facing growing pressure to not only collect building data for benchmarking and reporting purposes, but to also implement impactful solutions that leverage relevant data to actively improve sustainable operations. According to NYSERDA, HVAC equipment in particular accounts for about 40 percent of a building’s total energy usage — with this in mind, action to drive emissions reduction and energy efficiency, especially through HVAC optimization, is of significant importance for the industry. 

There are  many HVAC management systems currently on the market, but nearly all are designed to help owners and operators by monitoring building systems and identifying inefficiencies. The final and most critical step — actually remedying the inefficiency — is left to the property team. In some cases, building professionals are up to the task; but in others, essential fixes aren’t made, and the issues identified can languish for months on end. This gap in the market is just part of what drove RET’s latest investment in Parity

Parity’s technology platform is designed to transform the operations and energy management of mid-rise and high-rise apartment buildings with a capital-light, non-intrusive model. The platform utilizes an AI-powered system to optimize operations, taking complete control of a building’s HVAC systems through the existing BMS or by deploying off-the-shelf sensors and controls. This enables real-time performance optimization, minimization of energy waste, the elimination of the human error that can often lead to energy inefficiency in buildings, and a decrease in capital investment costs for operators. 

With its revolutionary technology, the company regularly reduces HVAC energy use by 15 to 25 percent — leading to cost savings of 30 to 50 percent for HVAC operations — this could mean up to $60,000 in savings annually for a typical 250-unit high-rise, though some buildings have yielded savings equivalent to $130,000 for a property of this size. 

Ensuring Improved Performance —  A Cost-Saving Guarantee

Relying on the effectiveness of its technology and the fact that it has full control of building operations, Parity is one of the rare building efficiency technologies that is able to guarantee cost savings to users. If a building’s projected cost savings are not achieved, Parity sends a check to the property owners to cover the difference. However, users shouldn’t be waiting around expecting a check from Parity to hit their inbox; while performance is guaranteed, buildings across Parity’s portfolio are already outperforming expectations and achieving average savings of 118% respective to projected savings. This means that the software leads to both a significant reduction in energy waste and a meaningful return on investment for the customer. 

As Parity’s solution brings multifamily owners and operators a clear financial incentive to improve operational efficiency, we’re eager to begin this partnership with the company, promoting the adoption of sustainable technologies to better both real estate assets and the environment in the short- and long-term.