Jan 27, 2012 12:58:00 PM

Keeping an Eye on Your Utility Usage in Your Commercial Real Estate

By Jordan Slater


Rising fuel costs coupled with increasing energy demands add up to utility costs that need to be monitored and controlled. Commercial real estate is particularly sensitive to utility costs, as the energy needs of tenants must be met, while controlling costs.


One efficient way to monitor and control utility usage, while keeping owner expenses to a minimum, is submetering in multi-tenant commercial real estate properties. By having a system that allows the owner or property management firm to measure utility charges, based on a tenant's usage, costs can be passed to the tenant in an informed and accurate manner.

These systems typically have water, gas and electric meters set up for each individual commercial real estate unit. While some utility companies are willing to individually meter tenant spaces, many do not. The landlord implements a metering system coming from the main meter from the utility company. Each individual unit gets its own submeter. Based on the usage in each unit, the tenant pays the actual usage to the landlord, who then pays the bill from the utility company.  Be sure to keep an eye on your usage, and ultimately, your expenses.

Utility Audit

Utility companies make mistakes and overcharge customers frequently. Incorrect estimated billing is a major contributor. Some errors go back a number of years. Using a utility monitoring company helps recover past overcharges and avoid them in the future.

Utility monitoring companies review electric, gas, water and other fuel accounts to analyze usage and cost patterns. The company keeps an eye on charges on an ongoing basis to ensure accuracy. They make sure actual usage and rate classes for billing are correct. They compare rates and services and recommend the most cost-saving and efficient levels of service. They have the experience to quickly and easily spot mistakes and fix them. They monitor equipment from the utility companies and the landlord and quickly alert the proper party to any problems needing repair.


Keeping an eye on utility usage in commercial real estate is worth the investment to reap continuing savings both in the short and long term.


Other articles to check out:

Understanding Rent Escalation Clauses

What Factors into My Occupancy Costs?

Reduce Your Commercial Occupancy Costs


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Topics: commercial real estate

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Jordan Slater