Market Segments in the Commercial Remodeling and Renovation Sector

John H. Reed and Andrew Oh, TecMRKT Works LLC
Donald R. Dohrmann, ADM Associates, Inc.
Sylvia Bender, California Energy Commission
Catherine Chappell, Heschong Mahone Group, Inc.
Pierre Landry, Southern California Edison Company

Keywords

Abstract

The commercial building remodeling and renovation market is little studied and little is known about segments in this market. Using data from in-depth interviews, and a survey of 341 decision-makers, four distinct owner or management-based market segments were identified. The four market segments are: the developer segment that buys, renovates, and holds buildings (buy/renovate/hold), the developer segment that buys buildings, adds value to them, and then sells the buildings (buy/renovate/sell); the owner-occupied buildings segment, and the ground lease segment for national chains and franchises.

The paper discusses how and why the level of interest in energy efficiency varies by segment. For example, the segments most amenable to energy efficiency are the owneroccupant segment and the national chain and franchise ground lease segment.

The paper briefly discusses the effectiveness of different program strategies for each segment. For example, energy contracts that include energy services provisions will be most attractive to owners or franchisees that hold their property for a length of time and pay their own energy costs. Energy contracts that include energy services may be of little interest to commercial operators who buy, renovate and sell.