Why Develop “All-Electric” Buildings?

By the end of 2022, we will be under construction on the last group of buildings in a portfolio of over a dozen “all-electric” buildings containing multifamily, office, and retail space. As a result of those experiences, we have found that there is no reason for us to ever develop a fossil fuel-powered building again. Why does this matter? It matters because in the last decade there has been a convergence of design, technology, and experience that means that owning a fossil fuel-powered building is now often more expensive over time and results in a higher risk factor than its all-electric competitor. Let’s expand on that.

For the past decade, we have managed the design and construction of several “all-electric” buildings. And, we have learned a thing or two – some lessons, the hard way. First, we design these buildings to consume substantially less power- about 30% of what a typical building consumes - and as a result, the building envelope is critical. We use better insulation for the walls and roof, and much better window systems. Next, we have refined our approach to heating and cooling using air-sourced heat pumps that provide better temperature control and more even airflow, with improved indoor air quality. Finally, our lighting packages allow for varied controls and an improved occupant experience, while our appliance packages perform better, use less energy, and also contribute to better indoor air quality. While this oversimplifies a complex process of design and modeling, the point is that all these components can be purchased “off the shelf”, and all you need to know is how to put them together cost- effectively.

With cities and states starting to require “all-electric” buildings and others, such as New York, implementing carbon taxes, electric building are less risky to own than their fossil fuel counter parts. If you’re family office or a real estate fund that holds assets for the long-term, electric buildings are more future-proofed than their fossil fuel-powered counterparts. They still have a small initial cost premium, but reduced cap rates and operating costs often offset that premium very quickly.