If you are brokering, managing, or investing in Colorado commercial or multifamily properties
larger than 50,000 square feet, you must now understand Colorado’s energy benchmarking
standards as part of your due diligence. The Energy Performance for Buildings statute (HB 21-
1286) requires owners of commercial, multifamily, or public buildings over 50,000 square feet
(Covered Buildings) to report annual energy use and meet set performance goals. This means
that every transaction now raises questions about compliance history, deadlines, and costs
associated with adhering to performance standards.
Energy Benchmarking and Building Performance
As a result of HB21-1286, the Colorado Energy Office (CEO) established Building Performance
Colorado (BPC). BPC implemented Colorado’s energy benchmarking program and Building
Performance Standards (BPS). BPC policies apply to all Covered Buildings.
Energy benchmarking involves tracking and reporting a building’s annual energy consumption
(i.e., electricity, gas, and other fuels) and comparing it to similar properties. The data helps
owners identify inefficiencies and cost-effective upgrades while enabling the state to establish
performance targets.
BPS requires owners to meet energy or emission reduction targets that support Colorado’s goals
of a 7% reduction in greenhouse gas emissions by 2026 and a 20% reduction by 2030 from
baseline levels. The CEO has stated that it will be flexible with early deadlines; however, owners
should not mistake this for leniency down the road. The trajectory leans toward tighter standards,
not looser ones.
Complying With Building Performance Standards
Owners will use ENERGY STAR Portfolio Manager, a free BPC reporting tool, to submit the
previous calendar year’s total energy use data including energy use intensity (EUI) and
greenhouse gas intensity (GHGI) by the annual benchmarking deadline of November 1.
Building owners can comply with BPC standards through one of two compliance options: (1) the
Energy Efficiency Pathway or (2) the Greenhouse Gas Reduction Pathway. The Energy
Efficiency Pathway focuses on reducing a building’s EUI. Owners can comply by either meeting
a property-type-specific target or displaying the required reduction from the baseline. The
Greenhouse Gas Reduction Pathway instead measures GHGI. Owners can comply by either
meeting a property-type emissions target or by reducing greenhouse gas intensity from baseline
levels.
BPC provides the BEAM Pathway Selection Calculator, to assist owners in evaluating potential
compliance outcomes based on building characteristics and estimated baseline data. Building
owners who failed to select a compliance pathway by July 1, 2025, were defaulted to the Energy
Efficiency Pathway.
Annual fees currently include a $100 benchmarking fee and a $400 Building Decarbonization
Enterprise fee per Covered Building, subject to increase. Failure to comply can result in
meaningful penalties. Missed benchmarking reports trigger monetary fines, as do failures to meet
applicable performance standards. Penalties escalate for repeat violations, and owners may not
simply pay penalties in lieu of achieving compliance.
Local Ordinances Require Additional Attention
In addition to statewide requirements, several Colorado municipalities have adopted local energy
benchmarking and performance ordinances. Denver and Boulder, among others, impose
additional reporting obligations, timelines, or performance thresholds that may differ from or
exceed BPC standards.
Accordingly, compliance analysis should not stop at the state level. A building may be compliant
with BPC requirements while simultaneously failing to satisfy a local ordinance. Owners,
brokers, and property managers should confirm whether local rules apply and understand how
those requirements intersect with statewide obligations, particularly in jurisdictions with more
aggressive enforcement frameworks.
Broker Due Diligence and Professional Liability Considerations
This is not background noise anymore, as benchmarking compliance is a material due diligence
consideration. Brokers and real estate professionals representing either side of a transaction
should confirm compliance under HB21-1286, verify that the benchmarking history is current,
and determine whether buildings are on track to meet performance standards.
From a professional liability perspective, failure to identify noncompliance may expose brokers
to claims that material information was overlooked or inadequately disclosed. Buyers will
increasingly expect clarity regarding benchmarking history, upcoming deadlines, and potential
capital investments required for future compliance. Sellers should similarly understand how
noncompliance could affect pricing, escrows, or post-closing obligations.
Lease structures may be affected as well. Efficiency upgrades to meet compliance targets may
require revising operating expense provisions, utility cost allocations, and capital expenditure
pass-through provisions in existing leases, which may necessitate tenant consent.
Financial and Market Implications
These standards will likely be reflected in asset values and underwriting. Buildings with strong
energy performance have lower operating costs, better marketability, and easier access to
financing and incentives. Underperformers face higher capital requirements and a smaller buyer
pool.
Lenders and investors are increasingly incorporating energy performance metrics into
underwriting and portfolio decisions, particularly as environmental, social, and governance
considerations gain prominence. For long-term owners, early engagement with benchmarking
data can inform strategic investment decisions and reduce regulatory risk over time.
Closing Thoughts
BPC and related programs continue to evolve, with new standards, guidance, and procedures still
emerging. For Colorado real estate professionals, staying informed and proactive is the best way
to manage risk, protect asset value, and navigate a regulatory environment that increasingly links
building performance to real estate outcomes.
