A large, publicly traded real estate investment trust (REIT) with more than 1,200 properties and an enterprise-level net zero commitment faced a practical challenge: how to translate portfolio-level ambition into asset-specific action.
Outcomes at-a-glance
- Up to $800,000 additional NPV per asset identified through optimized retrofit sequencing
- Projected 40% reduction in annual energy costs and 10% reduction in annual operating expenses
- Modeled pathway to ~80% reduction in operational emissions by 2040 for pilot assets.
Strategic opportunity
The REIT had recently acquired new properties and needed detailed decarbonization roadmaps tailored to each building’s condition, local grid profile, and capital constraints. While an existing vendor provided support, leadership required more granular modeling, stronger financial optimization, and greater flexibility to test alternative decarbonization scenarios.
In-house processes proved time-intensive and limited in their ability to model advanced technologies or optimize sequencing for capital efficiency. Traditional consulting approaches, meanwhile, could be costly and static—often producing one roadmap rather than a dynamic decision-making tool.
The stakes were operational and financial. Leadership needed to reduce emissions and energy intensity while protecting net operating income, managing capital expenditures, and maintaining investor confidence. Asset-level decisions would directly affect portfolio performance, cost of capital, and long-term valuation.
The central question: How can the REIT generate asset-specific decarbonization strategies that minimize cost, maximize NPV, and align with long-term net zero goals—without sacrificing speed or flexibility?
Solution
Telesto deployed Odyssey, its proprietary decarbonization and financial optimization platform developed jointly with Optiml AG, alongside Parallax, Telesto’s proprietary grid emissions forecasting tool.
The engagement focused on piloting Odyssey across select assets to demonstrate its ability to produce engineering-grade simulations and financially optimized roadmaps.
Asset-level digital modeling. For each property, Odyssey generated a “digital twin” model using science-based energy simulations. The platform incorporates hundreds of datapoints and applies ISO- and ASHRAE-aligned engineering methodologies built on EnergyPlus, the U.S. Department of Energy’s industry-accepted simulation engine.
The system models energy consumption and emissions trajectories through 2040. Grid carbon intensity is incorporated at the eGRID subregional level, with forward projections provided by Parallax.
Where additional data is available – such as floor plans, system conditions, renovation history, or utility data – the platform replaces benchmarks with asset-specific inputs to enhance accuracy.
Financial and emissions optimization. Odyssey integrates energy simulation outputs with proprietary optimization algorithms, including advanced computational techniques such as Monte Carlo simulations. The system determines the optimal combination and sequencing of retrofits based on user-defined objectives and constraints.
Scenario comparison and reporting. Odyssey enables side-by-side comparison of multiple strategies within a “strategy compare” interface. This allows leadership teams to move from static reports to interactive capital planning tools.
Advisory support. Beyond the software itself, Telesto provided onboarding support, including data cleaning, asset aggregation, strategy interpretation, and financial modeling validation. The engagement ensured that the platform outputs were aligned with the REIT’s capital planning processes and governance requirements.
Results
The portfolio optimization initiative produced detailed, financially optimized asset-level recommendations and:
- ~ $800,000 incremental NPV per asset
- ~ 40% annual energy cost reduction
- ~10% annual operating expense reduction
- ~ 80% reduction in operational emissions by 2040
Beyond projected savings, the REIT shifted how it approaches decarbonization planning.
Prior to the initiative, roadmap development was largely consultant-driven and static. After the pilot, leadership gained:
- Direct control over scenario modeling and optimization goals
- The ability to test multiple decarbonization pathways in real time
- Quantitative visibility into trade-offs between Capex, Opex, and emissions
- Streamlined reporting aligned with investor and board expectations
Scaled across the broader portfolio, Odyssey provides a structured, repeatable framework for tracking progress year over year, refining strategies as asset data improves, and integrating decarbonization directly into capital allocation decisions.
The initiative demonstrated that asset-level decarbonization can be engineered, financially optimized, and updated dynamically turning net zero ambition into measurable, asset-specific execution.
