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The Cost of Water Leaks? Bigger Than You May Think

By Gillan Taddune

Across the country, commercial properties are literally leaking money. Unbeknownst to property owners and managers, water is dripping — or streaming — out of their leaky pipes, costing them thousands of dollars each month. For most commercial properties, utility expenses are among the largest overhead costs and one of the most difficult to control. While many smart property owners have taken steps to reduce their energy use, most view water costs as more-or-less fixed. What’s more, most owners don’t notice fluctuations in their water bills unless they are fairly extreme. All of this adds up to an issue that is becoming an epidemic in commercial real estate: No one notices when there is a leak that is likely to increase operating costs, decrease net operating income, and significantly damage their property.

A facility in Phoenix offers a good example. The property managers were aware that the large fountain in their entry-way had a leak, but decided it was too expensive to repair and chose to ignore it. They had fairly little information to help them make this decision because there are so few ways to find information about water use on a property, much less to determine the financial impact of a leak. Seeing the total amount of water used on the property in a month, as they could on their water bill, hardly gave them an indication of the fountain’s water use, much less the size of the leak.

Eventually, the property owners installed water-tracking software on the property, hypothesizing the property’s high water bills had to do with an overuse of irrigation water. Instead, they quickly discovered the “small” fountain leak had been wasting 130,000 to 200,000 gallons of water per month, significantly impacting both their operating expenses and, by extension, their asset value. In addition, that amount of water was likely to do damage to the driveway where the fountain was located.

The EPA’s WaterSense program estimates that, on average, leaks can account for more than 6 percent of a facility’s total water use. Believe it or not, the Phoenix property is one of the lucky ones. In the case of major, undetected leaks, it’s not uncommon to see leaks represent an even bigger percentage of the property’s water use.

The root cause of this issue is not apathy, but a lack of information to help decision makers understand the impact that uncontrolled water use is having on their business. When most property owners only see a water bill every month or two, it’s almost impossible for them to gather the information they need to make informed decisions.

Today, there are technologies and services available to make properties — and their managers — smarter and to monitor water use throughout the property. Many of them are inexpensive compared to the amount that informed property owners save on their water bills as a result of using these services.

Across the country, property owners are realizing the power of data and embracing it to control costs. Water is the next frontier for connected buildings and those who have created systems to effectively track and manage it are quickly gaining a competitive advantage over those who allow their profits to slowly trickle out of their pipes.

Gillan Taddune is the CEO of Banyan Water, a leading provider of data-driven water conservation for enterprises.

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posted on 8/30/2017