Connected Buildings: Reducing Transitional Climate Risk Through Proactive Compliance

At two office buildings in Washington, D.C., our data-enabled compliance plan reduced projected penalties under the District’s Building Performance Standard by $1.1 million. Our Energy and Sustainability team completed thorough energy audits and used integrated building automation systems to optimize HVAC controls. We fixed non-working sensors, optimized sequences for the chilled water plant and completed LED lighting upgrades. These measures eliminated fee exposure for one building and put the second building on track to eliminate all fee exposure by 2026.

Case study: Proactive compliance in Washington, D.C.

Washington, D.C.'s Building Energy Performance Standards (BEPS) present a significant transitional climate risk for commercial real estate owners. Non-compliance leads to substantial financial penalties, demanding a proactive and strategic approach to energy management. Despite performing in the top 35 percentile for sustainability compared to similar properties, two RMR-managed office properties were not compliant with the Washington, D.C. BPS law. They were identified as having an estimated 2027 fee exposure of over $1.3 million, using calendar year 2024 performance. The challenge was clear: implement targeted, data-driven measures to mitigate this risk, eliminate fee exposure and ensure the properties met or exceeded regulatory requirements.

The solution

To eliminate this financial risk, RMR leveraged our data-enabled Connected Buildings platform. Our dedicated Energy and Sustainability team deployed a comprehensive, multi-faceted strategy designed to optimize performance and drive efficiency.

First, we conducted thorough energy audits of both properties to identify critical areas for improvement. This data-driven analysis informed a precise action plan. The team then integrated the buildings' automation systems with our central platform, enabling real-time monitoring and control.

Key operational enhancements included:

• System optimization: We identified and rectified non-working sensors and optimized operational sequences for the chilled water plant, ensuring the system performs at maximum efficiency.
• Lighting upgrades: We executed a strategic retrofit, replacing outdated fixtures with high-efficiency LEDs across both properties to significantly lower energy consumption.

This combination of advanced data analytics, systems integration and targeted capital improvements formed the core of our compliance plan, transforming risk into an opportunity for operational excellence.

Strategic impact

Through the precise implementation of our data-enabled plan, we successfully navigated the complex regulatory landscape and fortified the assets against climate-related financial risk. For the first building, all projected fee exposure was completely eliminated. The second building was set on a clear and actionable path to eliminate all fee exposure by 2026.

By leveraging the power of our Connected Buildings platform and the expertise of our Energy and Sustainability team, we reduced the combined projected fines by $1.1 million. This case study demonstrates RMR's commitment to using data-driven strategies not only to achieve regulatory compliance but also to protect asset value, enhance operational efficiency, and deliver superior, long-term performance.