Using Life Cycle Analysis to Improve Return on Investment (ROI)

Old Town Plaza - San Diego Commercial Office Space

If you were to glance at the Old Town Plaza blog and see posts like "Disposable Plastics" or "The Plague of Bottled Water," you might think that Intermarket Investment Group is just some crazy environmental group who found a company and platform to carry their message.

This could not be farther from the truth.

 In addition to a variety of other reasons, Intermarket's environmentally responsible change in mission came from one simple business metric: by increasing the life cycle of all the components required to run a company that owns and operates commercial office space, you can directly cut expenses and thereby increase profitability.  As any good businessman knows, reducing expenses is actually far more potent than simply increasing sales.

In the case of running Intermarket, we have found that reducing expenses is actually far more valuable than increasing sales because in the commercial real estate business, where inventory is predefined (we cannot just increase the number of shifts or outsource additional production to another factory to increase output like a consumer products company can), increasing sales is sometimes not even an option.  When our portfolio is fully leased, we cannot simply build another building in a month or two to increase inventory and subsequently increase sales.  Increasing inventory in commercial real estate takes years (or sometimes just a few quarters if you go the acquisition route - but that assumes you can even find a quality asset in which you can invest).

Old Town's Greenest Office Space - Old Town Plaza

That leaves us with reducing expenses.  By reducing expenses, we are directly increasing the free cash flow and subsequent profitability of a given property.  In turn, this also helps us to deliver more competitive rates either by lowering our rates while maintaining our product offering, keeping our existing rates and improving our product offering or increasing our rates slightly to deliver game-changing improvements to our buildings.  In theory, if our competitors have not reduced expenses at the same time and all of us are impacted by the same economic factors in the sub-market (Old Town/5th Avenue in San Diego), then this disparity will give us a competitive advantage in our space.  No matter what option we choose, reductions in expenses directly benefit our customers every time, all the time.

One good example of life cycle enhancement and augmentation is Solar Reflective Window Film.  We could replace all of our windows here at Old Town Plaza with the latest, most advanced dual-pane, Argon-gas, low-e windows on the market.  However, that would not only be cost-prohibitive, but it would also generate an inordinate amount of landfill waste prematurely because the existing windows have plenty of usable service life in them.  Instead, we chose to augment the existing windows with Solar Reflective Window Film with great results.  The film reflects more than 70% of the incoming solar radiation from the sun away from the building.  In turn, this reduces the heat load on the building and the subsequent HVAC cooling requirements which lowers our electricity consumption.  Keeping power consumption to a minimum reduces costs for our end-users.

While not a direct life cycle analysis project, our most recent water feature improvement (conversion of the courtyard fountain to a planter featuring plants native to the San Diego region), completed earlier this year, provides us another good example of how environmentally responsible investment can lead to improved profitability and better product offerings.

Fountain replaced by native plants

The conversion project reduced our water consumption 40% per month, on average.  Simultaneously, the City of San Diego is in the middle of a series of 20% annual rate hikes which started a few years ago.  Had we opted to do nothing, Old Town Plaza would have used the same amount of water running the fountain, but we would have been paying 20% more for the water each year (same level of consumption).  Instead, by investing in an environmentally responsible feature like native planters, we significantly reduced the impact of the unavoidable 20% rate hike that we were facing from the City of San Diego by greatly reducing consumption.  This netted our tenants direct insulation (not 100%) from cost increases in utilities.

In short, we are not "environmentalists" or anything close to it.  We are a small business that has found new meaning in the old adage that "less is more."  Intermarket does more with less - it is our trademark.


These are just a couple of ways that Old Town Plaza continues to set itself apart from the competition in the Old Town/5th Avenue commercial real estate sub-market of San Diego.  Located just one block off of the Interstate 5 Freeway, Old Town Plaza is the premier location for companies looking for superior value, unrivaled location to I-5 and I-8, close proximity to San Diego International Airport and walking distance to SPAWAR - all wrapped in an environmentally responsible and efficient package.  Click here to take a Video Tour of Old Town Plaza right now, check out our Video Tour on our website or contact our office today for a personal tour of our property. 

To view our available listings, click here:
http://www.leaseoldtown.com/leasing.html