The Myth of the Average Building

At first glance, buildings in a real estate portfolio might seem comparable. They’re grouped by energy performance certificates, construction year, or floor area, and strategies are often built around those averages. But here’s the truth: there is no such thing as an average building.

Each asset has its own operational history, envelope characteristics, technical systems, occupancy profiles, and local context. Two buildings with identical EPC ratings may have completely different retrofit needs, cost structures, and carbon reduction potential. Still, many decarbonization strategies rely on blanket assumptions: “Retrofit 3% of the portfolio per year,” “Apply measure X across all buildings,” or “Achieve Y% energy savings by 2030.” These approaches might sound efficient but they overlook the deep complexity hidden behind every facade. From talking to hundreds of real estate companies over the last years, we know: Treating a real estate portfolio as a uniform mass may be administratively convenient, but it’s technically kind of naive. 

Complexity Beneath the Surface 

Beneath the standard KPIs and efficiency labels, buildings reveal a level of complexity that defies generalisation. A retrofit decision is rarely about applying a single measure, it’s about understanding the unique interplay between building envelope, mechanical systems, user behaviour, and local climate.

Take two office buildings, both constructed in the early 1990s, with similar square footage and EPC ratings. On paper, they appear alike. But dig deeper, and the picture shifts: one may have outdated HVAC with oversized ductwork and inefficient zoning; the other, newer systems but poor insulation and glazing. Their decarbonisation pathways – and associated costs – diverge dramatically. This complexity is further amplified across large portfolios. Mixed-use assets, different ownership structures, heritage protection, or varying tenant demands add additional layers of constraint. Broad-brush strategies miss these nuances and risk underperforming where it matters most, also in regards to regulatory requirements.

Bottom-Up Beats Broad Brush

If buildings are fundamentally different, then strategies that treat them the same are bound to fall short. That’s why bottom-up modelling – asset by asset, component by component – is becoming essential for effective decarbonization.

With Real Estate Decision Intelligence (REDI), teams can move beyond average benchmarks and start working with granular, building-specific data. Instead of applying predefined measures across the board, REDI simulates the impact of different retrofitting strategies for each individual asset. That includes the technical feasibility, cost-effectiveness, carbon impact, and timing of each intervention. This level of precision is made possible through tools like Digital Twins and dynamic energy simulations, which create a virtual representation of each building and test hundreds of scenarios; long before a single euro is spent in audits. The result: smarter prioritization, lower CapEx, and higher confidence in the measures that truly move the needle.

One of the most common misconceptions around bottom-up modelling is that it’s too detailed to scale. But with the right tools, that’s exactly where its strength lies. Real Estate Decision Intelligence (REDI) allows asset & ESG managers as well as consultants to combine building-specific insights into portfolio-level strategies. Instead of managing dozens of isolated energy audits, they can run coordinated simulations across the entire portfolio, identifying patterns, clustering asset types, and creating phased renovation plans.

For example, if the data shows that early envelope upgrades in certain assets reduce HVAC system sizes significantly, these insights can be used to optimise CapEx allocation across the full portfolio. Instead of spending more, you're spending smarter and accelerating both ROI and carbon savings. 

Most real estate portfolios are managed with standard targets like” renovate X% per year. These goals are necessary but the tools to reach them can’t be one-size-fits-all. Every building is different. So are the risks, the costs, the opportunities. To meet ambitious climate goals without overspending or underdelivering, real estate needs methods that reflect that complexity. Methods that see buildings not as averages, but as systems.

Real Estate Decision Intelligence (REDI) provides that lens. It combines building-specific insights with strategic foresight, creating a clear path from scattered data to scalable decarbonization.