The Hierarchy of Needs for Commercial Real Estate

The Hierarchy of Needs for Commercial Real Estate

#tags: building investments building operations building portfolio performance energy management

Building owners are focused on providing safe, well-managed buildings at competitive rates to attract tenants and maximize their investment returns. Reducing a building’s energy consumption, while maintaining optimal tenant comfort and safety, can lower both its operating costs and carbon footprint. While simple in theory, building owners typically must make investments upfront to improve a building’s performance. Deciding which investments to prioritize at a single building is challenging enough, let alone doing so across an entire portfolio. Costs, impact on building performance, and required implementation time are all key factors to consider.


To get started, it is helpful to reference an intuitive framework developed by Nexus Labs called “The Energy Management Hierarchy of Needs”. This framework features three levels: 1) Measure, 2) Analyze, and 3) Invest. When applied to commercial real estate, it serves as a guide for owners and their property teams to both establish best practices and evaluate different solution providers.

Hierarchy of Needs for CRE Pyramid

Level 1: Measure

Hierarchy Level 1 (bottom)
Level 1 of the Hierarchy of Needs entails establishing a baseline for building performance. This serves as the foundation for deeper analysis that will fuel ideation and evaluation of performance-improving initiatives in individual buildings, as well as a reliable frame of reference for devising a strategy for portfolio optimization.


In order to properly measure a building’s performance, you must have the proper data. While reviewing utility bill data is an established part of building management and the first step in understanding a building’s performance, the key is to streamline this process and allow time for thoughtful analysis. While much of this data is still input manually by property managers and stored in spreadsheets, there are a number of technology solutions now that automate the utility bill collection process. Whether input manually or collected automatically, data must be verified for integrity to ensure that building performance is being measured accurately.


Level 2: Analyze

Hierarchy Level 2 - Collect and Analyze

After the comprehensive data collection process in Level 1, it is time to move on to Level 2 and analyze the data at a deeper level of granularity in order to understand system-level performance opportunities. This includes fine-tuning and automating the building’s controls through enhanced sequences of operation that include more dynamic equipment scheduling and setpoint adjustments.


Advanced analysis tools are crucial in helping building operators understand energy performance, at the building, equipment, and even zone-level. Making that information easy to digest through visually appealing dashboards is key. When applying the right technology building owners can take advantage of the additional benefit of real-time monitoring of building KPIs, including the capability of detecting anomalies and triggering notifications to the appropriate team members for a quick resolution. These types of features allow operators to analyze data quickly and efficiently to keep their buildings running smoothly.


Level 3: Invest

Hierarchy Level 3 - Invest

What building owners and their property teams often find when they have thoroughly analyzed the data is that there are a lot of opportunities to improve performance. But which ones should be implemented? How should they be prioritized? What groups of projects make sense? How can progress be tracked and results measured and verified? Building owners have the option of leveraging software to streamline the process of forecasting the financial impact of implementing various projects in an effort to optimize portfolio performance. Simulation technology calibrated with real-time data allows operators to analyze the greatest number of projects in the shortest amount of time with the highest degree of accuracy. This technology also helps confirm whether projects were implemented correctly and continue to perform over time as expected.


Progress: The Cyclical Nature of the Hierarchy of Needs


The process of moving through the Hierarchy of Needs is not intended as a one-time exercise for building owners. Building performance across a portfolio is not static and therefore should not be relegated to analytical exercises performed as point-in-time assessments spread out by multiple weeks or months. Given the dynamic nature of building performance, progression through the Hierarchy of Needs should be conducted on an ongoing basis to ensure continuous awareness of building performance metrics relative to predicted thresholds and to facilitate more routine evaluation of both newly-developed and existing initiatives prioritized across the portfolio.


Bractlet offers the industry’s only holistic end-to-end solution, which includes the comprehensive data and software tools needed for each level of the Hierarchy of Needs. Stay tuned as we delve deeper into each of these levels to discuss how this technology works and the use cases for the projects owners chose to prioritize. Or, to learn more, get in touch with the Bractlet team at