Advancing Deep Energy Retrofits for Commercial Buildings Summit

Advancing Deep Energy Retrofits for Commercial Buildings Summit
New Buildings Institute October 29, 2012
investment
management
development
management
sustainable
solutions
RealEstate Investments
Build-to-SuitDevelopment
AssetM anagement
Developer-led Retrofits
Separate M anaged Accounts
Green Development
Property M anagement
Distributed Infrastructure
Gerding Edlen
Green CitiesI,LP
Servicing Public and Private
Portfolio Building Owners
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overview
full-service real estate
investment,development,
and asset management firm

Founded in 1996

45 professionals specializing in acquisitions,assetand
property management,development,sustainable retrofits,
finance,and accounting

$600 million ofequity managed on behalfofclients

$5 billion worth ofassets;over60 developmentprojects
and retrofits

HQ in Portland;operations in Seattle,LosAngeles,and
Boston

Nationally recognized leaderin sustainable development

Over50 LEED buildings in portfolio,including many firsts:
o FirstLEED Gold & Platinum condominiums
o FirstLEED Platinum historicrenovation (Gerding theater)
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M eier & Frank Delivery Depot
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M eier & Frank Depot Building
project summary

Program:
o
o
o
o

180,000 sfon fourfloorsincluding structured parking
Fullcityblock
Listed on NationalHistoricregister
Two tenants – Vestas& Gerding Edlen
Financing:
o Totalprojectcost: $66M M
o Equity:
• $17M M investorequity
• $10.5M M historictaxcredits
o Debt:
• $29M M seniorloan
• $8M M interest-free loan
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M eier & Frank Depot Building
project highlights

Two generalcontractors (C&S,TI)

Two design firms(C&S,TI)

OneLEED submittal;LEED Platinum certified

Historiccomponent
o Incentives
• Federalhistorictaxcredit(20% ofprojectcost)
• 10-yr.freeze on assessed value forproperty taxes
• Sale ortransferofunused developmentrights
o Challenges /Opportunities
• Penthouse addition and setback requirements
• W indow heightand underfloorairsystem
• W indow system selection and sizing ofVRFmodules
• Solararraynearly flatdue to visibilityrestrictions
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M eier & Frank Depot Building
energy efficiency highlights

M etrics:
o 68% reduction in energy use
o EUI= 24.5
o $99,280 annualenergy cost(vs.$302,700)

Features:
o Interioratrium fordaylighting
o Lighting controls and occupancy sensors
o Operable windows
o High efficiency envelope;glazing tuned to each façade
o Thermalmass -exposed concrete floorsand ceilings
o Underfloorairdistribution -floors3 – 5
o Variable RefrigerantFlow system in perimeterareas
o Energy recovery on ventilation airsystem
o 125 kW solarPV
o Low-flow fixtures(reduce hotwaterenergy by10% )
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M eier & Frank Depot Building
energy efficiency economics
Agency
S tate / L o ca l :
Fe d e ra l : Description
Incentive
G re e n I nve st m e nt F u n d
$ 25,000 E n e rg y Tr u st o f O re go n
$ 255,000 E n e rg y Tr u st o f O re go n – S o l a r
$ 121,000 B u s i n e s s E n e rg y Tax C re d i t s
$ 336,000 S o l a r I nve st m e nt Tax C re d i t
$ 240,000 E PAC T D e d u c t i o n
$
98,400 S u b to ta l :
$
1,075,400 $
5.89 8
$/SF
M eier & Frank Depot Building
energy efficiency economics
C o n st r u c t i o n C o st
S o l a r A r ray
D e s i g n C o st s
I n c e nt i ve s
Base Building ( C o st /s f )
$ 124.13 $ ‐
$ 10.95 $ ‐
S u b to ta l
$ 135.09 $ 8.88 $ 143.97 % P re m i u m
G re e n B u i l d i n g P re m i u m /sf
$ 9.30 $ 4.38 $ 1.10 $ (5.89)
To ta l C o st /sf
$ 133.43 $ 4.38 $ 12.05 $ (5.89)
6.58%
Performance
A n n u a l E n e rg y C o st
$ 302,718 $ (207,278)
A n n u a l Wate r C o st
$ 10,593 $ (8,972)
A n n u a l U t i l i t y C o st /sf
$ 1.72 $ (1.18)
% re d u c t i o n
69%
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Pay b a c k a f te r i n c e nt i ve s : 7 . 5 ye a rs
$ 95,440 $ 1,621 $ 0.54 M eier & Frank Depot Building
critical deal points

HistoricTaxCredits

$8M M interest-free loan (cityofPortland)
o No payments for15 years
o Lease rate $4/sflessthan market

Property taxfreeze

Energy efficiency and green incentives
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Advancing Deep Energy Retrofits for Commercial Buildings Summit
New Buildings Institute October 29, 2012