Author: abrahamwien18

The Capital Budgeting Analysis of a Sustainability Project

Posted on September 24, 2015September 24, 2015 by abrahamwien18

by Paul L. Jones, CPA, LEED Green Associate, Principal,
Emerald Skyline Corporation

Regardless of whether you are building your ark and waiting for the sea level to rise or if you are a climate-change denier, the writing is on the wall: sooner or later, you will need to modernize your building to improve its sustainability and resiliency. Accounting for almost 40% of the world’s energy consumption and greenhouse gas emissions, buildings are considered a high-impact sector for urgent mitigation action on climate change.

Accordingly, building owners, managers and tenants need to assess the opportunities and possibilities for improving sustainability in order to optimize the benefits realized – both physically through reduced consumption and waste and financially through proper planning, budgeting and financing.

Let’s begin by recognizing that there is a robust business case for investing in sustainability and resiliency measures (see the Sustainable Benefits article “Welcome to Sustainable Benefits – Let’s begin with the benefits of doing a commercial building sustainable retrofit….”) which enables the stakeholders to improves profits, saves the planet and be socially responsible corporate citizen (the “Triple Bottom Line”).

The first step in creating a sustainable retrofit program is to benchmark the property. According to Ms. Clare Broderick in her article, Creating an Energy Efficient Plan – One Step at a Time, (GlobeSt.com, 3/4/2015), “There is much truth to the adage, “whatever you measure improves”. Whether you are responsible for one building or a portfolio of properties you need to know your starting point in order to gather quantifiable results.”

Another step to facilitate the cooperation and sharing of costs and benefits between the landlord and the tenant is to align the interests through a Green Lease (for more on Green Leases, see the Sustainable Benefits article “Overcome Obstacles to Going Green with Green Leases“). Systematically including sustainability clauses at lease creation or renewal facilitates energy efficiency, sustainability and resiliency retrofit projects.

Sustainability and resiliency measures are not all capital-intensive. Many relate to building operations – like aligning operating hours with actual building occupancy or changing the time when cleaning crews work. Conventional wisdom states that the best way to start a sustainability program is to begin with free or low-cost measures which creates an environment where people who work or visit a building start thinking about reducing, reusing and recycling. (see the Sustainable Benefits article “Going green – Fifty free or low cost ways for commercial property owners, managers and tenants to begin.”).

While low cost measures and the replacement of energy-inefficient lighting and equipment occurs at the time of natural replacement as part of the annual capital budgeting process for property maintenance, the timing for a significant building sustainable retrofit is usually determined by the investment or occupancy cycle of the building:

To attract a new tenant or retain an existing one;
As part of the process to prepare a property for sale; and
Upon acquisition as part of a value-enhancement business plan.

Maximizing the benefits from investing in the modernization (sustainability) and risk-reduction (resiliency) of a building utilizes a capital budgeting approach and requires the diagnostic review of the building which provides an understanding of the current equipment in use and an assessment of the improvements that can be made to accomplish your sustainability goals and objectives. The key to stakeholder action is to use capital budgeting based on forward-looking investment plans that facilitates the decision-making process.

In addition to planned equipment replacement upgrades, the first type of upgrade which is typically analyzed and approved as part of the annual management plan involves low-impact initiatives which generally have a short payback and can be implemented in currently occupied/leased buildings. These measures include commissioning an energy audit, replacing lighting and installing occupancy sensors and mid-level building energy management and control systems with interval energy data monitoring among other programs. In the case of these types of improvements, the capital budgeting decision can be limited to the relevant costs and benefits as hereinafter described.

The second is referred to as a “deep refurbishment” or “deep retrofit” project that aim to achieve high energy performance of the whole building which may include upgrading the building envelope, replacing the base building lighting systems, installing next generation smart building automation systems, adding solar or other renewable energy systems that require significant capital investment that cannot be recovered solely through the energy savings of the first few years, and the financial analysis of investment opportunities needs to include the impact on asset values.

Simple capital budgeting measures that are commonly used by engineers and contractors in proposals are the Payback Period and the Return on Investment:

The Payback Period in capital budgeting is the amount of time necessary to recapture the investment in a retrofit project, or to reach the break-even point. For example, the cost to upgrade lighting to LED is $25,000 which is forecasted to generate $14,000 in energy and maintenance savings would have a 1.79 year payback period (Cost divided by annual savings or earnings).
The Return on Investment is the inverse of the Payback Period and calculates the percentage return on an investment relative to the investment’s cost. In our example, the Return on Investment would be 56% (annual savings or earnings divided by cost).

While both the Payback Period and Return on Investment provide a quick way to evaluate and compare capital projects, the next level of analysis is multi-year and involves the time value of money which are commonly used in analyzing real estate investments. They are the Discounted Cash Flow, Internal Rate of Return. Another method is the Profitability Index and, finally, the method that is recommended in evaluating alternative investments is Life Cycle Costing. For all of these measures, it is important to forecast anticipated savings, earnings and costs over the investment horizon (typically, the life of the equipment):

The Discounted Cash Flow (“DCF”) method “discounts” the estimates of future savings, earnings and costs using the cost of capital or other investment threshold to arrive at a present value estimate. The cost of the project is then deducted from the present value to arrive at the Net Present Value (“NPV”). The project is acceptable if the NPV is greater than zero. It can also then be used to compare to other projects.
The Internal Rate of Return (IRR) is the rate at which the NPV of cash flows of a project is zero (i. e, the rate at which the present value of the future cash flows equals the initial investment). This is a yield calculation and the project is acceptable if the project IRR is greater than the Cost of Capital or other investment return threshold.
The Profitability Index (“PI”) is calculated by dividing the present value of the project’s future savings, earnings and costs by the initial investment. A PI greater than 1.0 indicates that the profitability is positive while a PI of less than 1.0 indicates that the project will lose money (the NPV would be less than zero). It is a useful tool for ranking alternative projects because it allows for the quantification of the value created per unit of investment. Most of the time the PI will be consistent with the NPV methodology; however, they may be in conflict due to different project scale or different pattern of cash flows. Conventional wisdom is to use the NPV when the PI is in conflict with it.

In each of the NPV, IRR and PI, the future savings are determined using the difference in future consumption/expenditures based on the economy of the new equipment or process over the anticipated costs of continuing use of the existing equipment.

Life Cycle Costing (“LCC”) is a tool to determine the most cost-effective option among different competing alternatives to purchase, own, operate, maintain and, finally, dispose of an investment in property, plant, equipment or process. According to BusinessDictionary.com, it is the “Sum of all recurring and one-time (non-recurring) costs over the full life span or a specified period of a good, service, structure or system. It includes purchase price, installation cost, operating costs, maintenance and upgrade costs, and remaining (residual or salvage) value at the end of ownership or its useful life.”

Consider the following example in the selection between two air handling units (from “Sustainability/LEED and Life Cycle Costing – Their Role in Value Based Design and Decision-Making” by Stephen Kirk, PhD, and Alphonse J. Dell’Isola, PE, date unknown):

Consider the selection between two air handling units. A 10% discount rate, a 24-year life cycle and a differential energy rate escalation of 2% per year are assumed. Other relevant data (NOTE: For all capital budgeting decisions, only incremental cash flows are included. Accordingly, sunk costs – those costs that have already been incurred – cannot be a part of the incremental cash flows used in the financial analysis of a capital project.) are:

Type of Cost	Alternative 1	Alternative 2
Type of Cost	Energy Efficient	Economy
Initial cost	$15,000	$10,000
Energy (annual)	1,800	2,200
Maintenance (annual)	500	800
Useful life	12 years	8 years

The solution begins by converting all annual or recurring costs to the present time. Using the present worth annuity factor, the recurring costs of maintenance would be:

Alternative One: maintenance (present worth) = $500 x (8.985) = $4,492

Alternative Two: maintenance (present worth) = $800 x (8.985) = $7,188

According to the discount rate tables, the present worth of the energy costs for each alternative would be:

Alternative One: energy (escal. @ 2%) = $1800 x (10.668) = $19,202

Alternative Two: energy (escal. @ 2%) = $2200 x (10.668) = $23,470

Replacement or nonrecurring costs are considered next. When one or more alternatives has a shorter or longer life than the life cycle specified, an adjustment for the unequal life is necessary. If the life of an alternative is shorter than the project’s life cycle, the item continues to be replaced until the life cycle is reached. On the other hand, if the item life is longer than the specified life cycle, then a terminal or salvage value for the item is recognized at the end of the life cycle. This treatment using the present value factors is illustrated as follows:

Alternative Two: replacement (n = 8) = $10,000 x (0.4665) = $4,665

Alternative One: replacement (n = 12) = $15,000 x (0.3186) = $4,779

Alternative Two: replacement (n = 16) = $10,000 x (0.2176) = $2,176

The salvage value for both systems equals zero since they both complete replacement cycles at the end of the twenty-four year life cycle. A summary of present worth life cycle costs follows:

Type of Cost	Alternative 1	Alternative 2
Type of Cost	Energy Efficient	Economy
Initial cost	$15,000	$10,000
Maintenance (recurring) cost	4,492	7,188
Energy (recurring) cost	19,202	23,470
Replacement (nonrecurring), year 8	0	4,665
Replacement (nonrecurring), year 12	4,779	0
Replacement (nonrecurring), year 16	0	2,176
Salvage, year 24	0	0
Total present worth life cycle costs	$43,473	$47,499

The first alternative would be selected on the basis of this LCC analysis.

Of course, any analysis should reflect the rebates that are available from manufacturers, utilities and governmental agencies.

As you can tell, the simple Payback Period and ROI analyses may be appropriate for small projects, like replacing the lighting, but using the DCF, IRR and PI methods provide better information while Life Cycle Costing Analysis provides the best basis for evaluating a project, or alternatives among projects, in making the capital budgeting decision.

As a CPA, I know that these analyses require time and skill to accurately prepare, but making sound capital budgeting decisions when improving a property using these techniques is the lynchpin of profitability. Emerald Skyline Corporation is uniquely qualified to be your advocate in planning, analyzing and executing your sustainable and resilient retrofit project.

In my next article, I will present the investment analysis of a “Deep Retrofit” as pioneered by Rocky Mountain Institute.

Renovation Versus New Construction – Choosing the Right Path

Posted on September 3, 2015September 3, 2015 by abrahamwien18

By Julie Lundin, NCIDQ, LEED AP ID+C, ASID, Director, Emerald Skyline Corporation

As both the owners and the designers of a commercial building in Boca Raton it was essential that we examine the pros and cons of renovation vs. new construction and the impact on our project. When considering renovation vs. new construction for any project, it is important to understand that both paths lead to different and unique results. Comparing the merits and challenges of each against the needs of a project is crucial in determining what the best options are. Our design team collaborated and brainstormed to determine the issues involved, document the issues and prioritize them. This process helped us to determine that a major renovation will make the most sense for our building and our sustainable goals.

The building is an unoccupied auto body shop located on a former brownfield. Whether to save or demolish an old building has always been a question for owners, developers and cities. We are applying the concept of adaptive reuse to this project. It is the idea of “twice green”, not just repurposing an older building, but also making it even more environmentally friendly in its new life. This project will convert an existing eyesore structure into a rehabilitated sustainable building.

How green is adaptive reuse?

The National Trust for Historic Preservation published a report on the environmental benefits of adaptive reuse. The Greenest Building: Qualifying the Environmental Value of Building Reuse, demonstrates through case studies that reusing buildings can save from between 4 to 46% over new construction.

These findings include:

Reuse Matters. Building reuse typically offers greater environmental savings than demolition and new construction. It can take between 10 to 80 years for a new energy efficient building to overcome, through efficient operations, the climate change impacts created by its construction.

Scale Matters. Collectively, building reuse and retrofits substantially reduce climate change impacts.

Design Matters. The environmental benefits of reuse are maximized by minimizing the input of new construction materials. Renovation projects that require many new materials can reduce or even negate the benefits of reuse.

The Bottom Line. Reusing existing buildings is good for the economy, the community and the environment. At a time when our country’s foreclosure and unemployment rates remain high, communities would be wise to reinvest in their existing building stock.

The U.S. Green Building Leadership in Environmental and Energy Design (LEED) strongly encourages reuse of an existing site and building. By using LEED principles during design and construction points toward LEED accreditation can be achieved. The incorporation of sustainable solutions into our design and materials will create a healthier building, reduce negative impacts on the environment, and utilize the economy of reuse. Every material has an impact, the fewer building materials used in a rehab project, the less environmental impact there will be.

The decision to renovate rather than build new has many challenges. Key factors typically considered in this decision could have easily sent us in a different direction if sustainability was not important to our project. The budget to accomplish a major renovation for this project may not cost less than new construction but the sustainable benefits are significant. The condition of the current structure will require many changes and improvements. The building needs updated technologies, energy efficiencies, and time challenges to complete. By renovating we are diverting waste from being placed in landfills, we are disturbing less native vegetation and contributing less erosion and adverse effects on the land. The decision to renovate this older structure will provide a safer and healthier environment for its users while creating an enhanced appearance.

The existing footprint allows only so much floor space. To overcome this, we are going vertical and building a partial second floor. Building above is less expensive than building outward. A key consideration in many designs should be on how to best utilize the building while using smaller spaces.

The age old question of whether to build new or renovate has become even more complex as we seek to determine which has the least amount of impact on our environment. While the ease of new construction may be preferred, the greater potential for reducing your carbon impact during renovation compared to a new construction is apparent over a 75 year life span of a building. As The National Trust for Historic Perseveration recently stated that the greenest building may be the one you already own – and this is the reason we selected to renovate rather than build new.

http://www.preservationnation.org/information-center/sustainable-communities/green-lab/valuing-building-reuse.html#.VehletJRFMM

Beauty and Function: Landscaping for Sustainability

Posted on September 3, 2015September 3, 2015 by abrahamwien18

By: Kendall Gillen, Biologist, LEED Green Associate
Associate LEED Process Management for Emerald Skyline Corporation

Many building owners and managers take into account the interior and exterior of a building itself when considering sustainable initiatives, but just as important is the area surrounding the building. Landscaping can make a tremendous difference in the sustainability and qualification for LEED certification of a project. Sustainability is certainly an integration of many different factors, and landscaping is a significant one.

Through employing different strategies, landscaping can be practical, functional, and aesthetically pleasing. There are different factors that affect the level of landscape sustainability. Two of the most important are the types of vegetation chosen and the amount of potable water required to keep the plants healthy, otherwise known as irrigation. Not only can efficient landscape design provide noteworthy credit toward achieving LEED certification, but it can also provide substantial water-energy savings. This should be a great motivator for owners and managers to look to their landscaping for improvements to their bottom line.

As stated in a study conducted by the California Sustainability Alliance, water is a necessary resource for any landscape to survive and function[1]. However, not all landscapes are created equal. Climate, weather conditions, and vegetation grown can all impact the amount of water required to sustain life. Typically, if non-native plants are chosen, irrigation will be needed because they cannot survive on local precipitation levels alone. Thus, researching plants with a low water need specific to the project’s local climate is of the utmost importance.

Many states have online databases for irrigation friendly plants. Since we are located in the tropical climate of South Florida, here are just a few of the many trees, plants, flowers, and grasses that are ideal for reducing irrigation demand as found by the Florida-friendly Plant Database:

Silver Palm
Scrub Palmetto
Cocoplum
Seagrape
Jamaica Caper Tree
Gumbo Limbo
Fiddlewood
Crinum Lily
Blanket Flower
Beach Sunflower
Purple Love Grass

All of the above vegetation has a medium to high drought tolerance. There is also a resource listing the Plant Hardiness Zones for the entire nation available through the USDA. Once a project’s Plant Hardiness Zone is found by zip code, one can search for plants that thrive within that particular zone.

Choosing native vegetation is a step in the right direction, however without active management of landscape irrigation with adjustments to precipitation levels, the savings of native vegetation alone could potentially be nominal. To fully benefit from using indigenous and drought-resistant vegetation, the irrigation system must be managed. This is why the integrated process of landscape operation, management, and maintenance is so crucial.

Low-volume irrigation systems are a broad classification of systems that provide water more directly to the ground instead of spraying in the air where water can be lost to wind or evaporation.
- This is a great starting point when choosing a system that fits a specific sustainable project need. By slowly releasing moisture, these systems greatly reduce runoff1.
Rainwater collection and re-use for landscape irrigation is another method to decrease water-energy expenditures. This harvested water can also be used for non-potable purposes such as toilet flushing.

The benefits to native vegetation and water efficient landscaping are plentiful. As previously stated, huge savings in water-energy can be achieved as well as the following:

Reduces the heat island effect which occurs when dark building and paving surfaces absorb the sun’s energy and re-radiates it throughout the day and night raising the ambient air temperature
Conserves natural resources and provides a habitat for native wildlife
Improves HVAC efficiency which is achieved through the shade generated by the proper selection and placement of trees and shrubs
Minimizes landscape maintenance requirements allowing the building owner to save on labor and materials

Undoubtedly, landscaping can play a huge role in the overall sustainability of a project, whether that is a retrofit or new construction. The take-home message should be to plan ahead and strategize when it comes to landscaping and irrigation. Also, having a water efficient landscape does not necessitate elimination of beauty. Use the abundant resources available online or through a professional and be responsible with water use. Water is in fact our most precious natural resource and it is our obligation to conserve.

[1] California Sustainability Alliance. Water-Energy Savings from Efficient Landscape Design in California. July 2015.

When assessing risk and reward in acquiring commercial real estate – be sure to cover all your bases including sustainability and resiliency

Posted on September 3, 2015September 3, 2015 by abrahamwien18

by Paul L. Jones, CPA, LEED Green Associate

It is a great day – you have just put a property you like under contract. Now the work begins…conducting your acquisition due diligence. You know the program:

Obtain the deliverables from the seller
Research title for exceptions and obtain insurance binder
Ensure compliance with building and zoning codes
Engage the appraiser
Hire an engineer to conduct a property condition assessment
Hire an environmental engineer to prepare a Phase I environmental site assessment
Abstract leases and agree to the rent roll, check expense pass-through calculations and conclude on in-place and prospective income
Analyze the market and assess the property’s competitive profile including Green certification, utility expenses (electricity, gas, water and waste) and resiliency
Review all existing contractual relationships and obligations, including property maintenance, service and other agreements, warranties (equipment, roof, elevator, etc.)
Obtain property insurance quote and coverage binder
Establish the veracity of the operating statements and establish an operating budget
Update the cash flow forecast and yield assessment to evaluate the purchase price and desirability of the investment

What if I were to tell you that with all this work, you may not have covered all your bases. Let’s go back to the purpose of your acquisition due diligence: to ensure that you are getting what you thought you were getting and to assess, eliminate or quantify the risk and rewards in the investment.

Just like your market analysis which looks at both current conditions as well as the pipeline of future competition and the affordability of new competitive construction; In a rapidly changing environment, it is important for purchasers and investors in real estate to evaluate the property’s operating and energy efficiency, indoor environmental quality and resiliency as well as anticipate future environmental, regulatory and operating conditions.

Regardless of your personal position on climate change and sea level rise, commercial real estate is going to be affected – and because of real estate’s primary characteristic – it is immovable – the effects can be significant.

According to the report, “Risky Business: the Economic Risks of Climate Change in the United States” which was published last summer, “If we continue on our current path, by 2050 between $66 and $106 billion worth of existing coastal property will likely be below sea level.”
FEMA is anticipating a 45% growth in the areas susceptible to flooding due primarily from sea level rise by the end of this Century – just 85 years away.
According to the Institute for Market Transformation, “fourteen cities, two states and one county in the United States have passed laws requiring benchmarking and disclosure of energy use in buildings.” To learn more about where and under what conditions benchmarking is required, go to org. (FYI – these requirements are soon to affect over 5 billion square feet of space AND the EPA estimates that buildings that are benchmarked save an estimated 7% in energy over three years).

I live in Miami. Last week, we were in the cone of TS Erica which looked like it could grow into a hurricane. Businesses and people in South Florida began making preparations by buying staples like gas, batteries, non-perishable food supplies and reviewed their disaster plans. Thanks God the storm did not materialize and all we had was a hard rain which did cause flooding throughout our community. Climate change and sea rise are similar – you prepare for the worst and hope for the best. It does not hurt that in preparing for the worst, we actually are able to delay the time for the rise to occur (through a reduced carbon footprint). Accordingly, prudent investors are well advised to include the following additional due diligence procedures to assess the sustainability and resiliency risk inherent in the property.

Obtain information on the risks the local community experiences due to climate change which could range from increased storm intensity and flooding due to sea level rise, wild fires and water restrictions due to drought conditions, or increased utility usage due to higher average temperatures.
Obtain information on new or prospective municipal environmental requirements and evaluate the property leases and operations to determine the ease and cost of compliance.
- For instance, if benchmarking is going to be required, do the leases in place require the tenant to share utility usage information (if, as is the case with many properties, the tenant pays utilities directly).
In an era of increasing utility costs and more efficient lighting, HVAC and other systems, do the leases provide for a proper sharing of the cost of replacing the equipment if it results in a reduction in utility usage? See my article on Green Leases in the Sustainable Benefits archives.
Obtain current and prospective FEMA flood maps to ascertain the risk and timeline the property will be in a flood zone in the future.
If the property is not a Green-rated building (LEED, EnergyStar, etc.), have the engineer assess the age and efficiency of the building systems.
From your insurance agent, obtain information regarding anticipated future availability and rate increases.
In evaluating the competitive leasing market, evaluate the relative absorption, rents, occupancies and tenant quality of Green buildings vs. traditional buildings to determine the market demand for sustainable buildings.
Evaluate the building’s ability to absorb and recover from to actual or potential adverse effects of stronger storms (wind and rain), higher storm surge and more frequent flooding in coastal areas or tornados, wildfires and dust storms in other areas. Each location has its own set of risks. Some resiliency due diligence questions to ask are:
- Is the building site and entrance flood-proof?
- Is the landscape design hazard-resistant?
- Does the building have back-up power systems including HVAC and water)?
- How secure is the interior environment from damage due to higher storm intensity?

The checklist of due diligence items and questions to be answered with regard to a property’s sustainability, resiliency and ability to comply with ever evolving government, insurance company and tenant requirements needs to be customized based on the location of the property as well as its class and quality.

In a November 2014 article, “Do-or-Die Due Diligence, Auction.com Vice President Andre Cuadrado warns “The due diligence process is one of the most important, yet challenging aspects of investing in real estate. If it’s not conducted thoroughly with a keen eye, an investor could end up with bad deals and lose millions of dollars.”

Cuadrado advises investors to spend the time and resources necessary to conduct due diligence thoroughly. “Some people try to save money on the process,” he notes, “but it’s expensive to be cheap when conducting due diligence, as your investment may end up not being what you thought it was.”

Remember, as Sun Tzu is quoted from The Art of War: “Every battle is won before it is even fought.” This is true for real estate investing as well – complete and thorough due diligence is the key to risk reduction and profit enhancement.

The breadth and depth of our experience and understanding of commercial real estate due diligence, sustainability and resiliency, Emerald Skyline Corporation is uniquely qualified to be your advocate in planning and executing your due diligence needs.

A Green Lease Overcomes a Primary Obstacle to Commercial Properties Going Green

Posted on July 30, 2015July 30, 2015 by abrahamwien18

by Paul L. Jones, CPA, LEED Green Associate, Principal, Emerald Skyline Corporation

One key obstacle to overcome for commercial buildings is the incongruous lease structure. Under the most common commercial lease structures (Modified Gross and Net), the costs of a sustainable retrofit are borne by the owner while the cost savings from reduced utility bills and maintenance costs as well as the improved indoor environment inure to the benefit of the tenant.

The solution is to create a lease structure that equitably aligns the costs and benefits of efficiency, sustainability and/or resiliency between building owners and tenants, known as a Green Lease (also known as an aligned lease, a high performance lease or an energy efficient lease). In short, a green lease facilitates cooperation between landlords and tenants to make their buildings and individual spaces energy and water efficient.

Last month, the US Department of Energy acknowledged property owners, tenants and brokers who are leaders in using green leases to save energy and water in commercial buildings. In a July 2nd National Real Estate Investor article entitled “The Greening of Leasing,” Susan Piperato interviewed Jonathan Saltberg and Jaxon Love of Shorenstein Properties which was one of the “Green Lease Leader” honorees.

Figure 1 Source: National Real Estate Investor, 7/2/2015; Institute for Market Transformation

According to Jaxon Love: “We survey our tenants annually on sustainability and track interest and satisfaction with our program. In 2014, 66 percent of our tenants indicated that green building operation is important or very important to their company; 68 percent of tenants indicated that our green building operation is good or excellent.”

Further Ms. Piperato reports that Shorenstein Properties has cut energy use by 16.2% and cut carbon emissions by almost 15% which is in-line with industry expectations of a 10% to 20% savings in energy and water monthly.

According to Meaghan Farrell, energy and sustainability service, Jones Lang LaSalle (JLL), “Green leases combine the productivity, comfort and sustainability features that tenants are looking for in office space while supporting landlord priorities of improving the triple bottom line and occupancy rates. In addition to achieving both tenant and landlord objectives, green leases have social, economic and environmental implications for companies operating in today’s global economy. Green leases truly are the future of commercial real estate.” (10 Reasons to Sign a Green Office Lease, Meaghan Farrell, Environmental Leader, 10/22/2014. http://www.environmentalleader.com/2014/10/22/10-reasons-to-sign-a-green-office-lease/#ixzz3GtXfESRz)

Green leases not only bring congruity to the financial requirements necessary to do a sustainable retrofit of a building but also to encourage owners, tenants and their employees who occupy the building to employ sustainable building operations.

The JLL Energy and Sustainability Services team has identified that collaboration by tenants and landlords in negotiating and executing a Green Lease results in the following ten benefits (Shorenstein Properties notes that the collaboration required to create a green lease is the first benefit of the program):

Reduce the utility (power and water) consumption, reduce maintenance costs and save money
Improve working relationships between landlord and tenant
Support tenant and landlord corporate sustainability initiatives
Enhance corporate image/brand (especially important for retailers, manufacturers and large public companies and financial institutions)
Demonstrate vision and thought-leadership
Improve civic relations – with climate change, municipalities appreciate buildings and companies that help the community become sustainable and resilient
Contribute to LEED and other green certifications which is increasingly important for buildings to maintain and improve their competitive position
Improve employee productivity, recruitment and retention through proven that daylighting and other sustainable strategies
Generate additional savings and benefits through waste stream diversions
Do the right thing for the earth and humanity in order by reducing the building’s carbon footprint

As stated by Adam Siegel, VP – Retail Industry Leaders Association (RILA), “Green leasing is a process to identify lease provisions that can potentially be modified to address both landlords’ and tenants’ sustainability goals. These provisions tend to foster efficiency improvements that can save both parties money.”

As reported by the RILA Retail Green Lease Primer, lease provisions that modify a standard lease agreement to a green lease fall into five primary areas:

Provide for improvements to the base building shell and common areas;
Provide for improvements to the tenants’ interior spaces consistent with the building’s permitted uses;
Encourage efficiency investments by allocating the benefits derived to the party that is making the investment;
Facilitate the sharing of energy and water usage and waste generation data increasing required for compliance with municipal benchmarking regulations or LEED/Energy Star certification guidelines; and
Clarify who has the rights and responsibilities to make sustainable improvements in spaces like the rooftop.

According to the Shorenstein Properties team, the Green Lease provisions that they are working to incorporate into all of their leases include: Energy alignment; tenant sub-metering, energy information sharing, building performance certifications and green building standards.

The aforementioned RILA Retail Green Lease Primer (available here: http://www.rila.org/sustainability/issues/Pages/RetailGreenLeasePrimer.aspx) lists 13 specific areas of focus which are provided with the caveat that “Each company should assess the costs and benefits of each term before including in their contracts:”

Extend/lengthen the lease term which reduces waste associated with tenant replacement and improvements;
Expense reimbursement methodology (.In an article published in the September/October 2010 issue of The Leader, Elizabeth King Fortsneger, a CPA and LEED AP, states: “If the goal is to keep both owners and tenants motivated to support the building’s green initiatives, the modified gross lease, net utilities with sub-metering and possibly an expense stop (full service except the tenant pays utilities) may be a viable alternative.”);
Permitted use that define allowable/restricted uses for the leased premises;
Leased premises tenant build-out specifications;
Capital improvement provisions that allow the landlord to amortize and recover capital costs associated with qualifying sustainable improvements to building and common areas;
Include low-cost efficiency project expenditures in the definition of operating expenses for tenant reimbursement;
Align tax benefits and other monetary incentives for building improvements with the investing party (landlord or tenant);
Submeter each tenant space for electricity, natural gas and water with billing of tenants based on the submeter readings where state codes and utility tariffs allow it (According to Mr. Love, “…submetering…gives the tenant direct responsibility for and control over their energy (and water) cost. The economic incentive to save energy is a powerful motivator.”);
Utility data sharing whereby the tenant provides energy and water consumption data to the landlord monthly while the landlord provides the tenant with periodic reports on the performance of the whole building. As more cities require benchmarking information from landlords, the ability to gather the necessary information from tenants is a necessary condition for regulatory compliance;
Specify sustainable maintenance policies, procedures and materials for use in tenant spaces;
Specify sustainable maintenance policies, procedures and materials for use in common areas;
Define tenant obligations to participate in recycling programs which facilitates the sustainability objective of reducing waste that goes into a landfill; and
Allow rooftop or general access and control to install energy generation systems (solar power) and/or other sustainable improvements.

NOTE: For existing tenants, green lease provisions can be added to the existing lease through a “green lease addendum” that replaces or supplements portions of the lease by adding terms and incentives.

As with every lease, both landlords and tenants need to work together to develop the green provisions appropriate to the property, its use and the tenant space. Quantifying the costs and benefits may require a green diagnostic review/assessment which provides a baseline understanding of the current property operations for inclusion as benchmarked sustainability criteria in green leases, or current lease addenda.

Working with an advisor like Emerald Skyline Corporation whose principals understand both commercial leasing and sustainability can help facilitate the negotiations and the accomplishment of both your investment objectives and your sustainability goals.

Using Daylighting to Save Energy and Enhance Views

Posted on July 30, 2015July 30, 2015 by abrahamwien18

By Julie Lundin, NCIDQ, LEED AP ID+C, ASID, Director, Emerald Skyline Corporation

My post on the design and progress of our commercial building focused on an overview of what sustainable design is and how it impacts a building’s design and construction and on-going building operations. You can see that post here. A sustainable building utilizes many concepts, solutions and products to incorporate the six fundamental principles of sustainable design:

Optimize Site Potential
Optimize Energy Use
Protect and Conserve Water
Optimize Building Space and Material Use
Enhance Indoor Environmental Quality (IEQ)
Optimize Operational and Maintenance Practices

This post explores the concept of Daylighting and Views, which impacts two areas of the fundamental principles of sustainable design: Optimization of Energy Use and Enhance Indoor Environmental Quality (IEQ).

Daylighting is the ability to maximize or control the use of natural daylight in a building in order to reduce the need for artificial lighting and reduce energy use. Access to daylight inside a building helps create a healthy, comfortable and productive environment for its occupants while reducing as much as one-third of total building energy costs.

Implementing daylighting on a project goes beyond simply listing components to be gathered and installed. Daylighting requires an integrated design approach to be successful. It can involve decisions about the building layout, site, climate, building components such as windows and skylights, lighting controls and lighting design criteria.

The science of daylighting design is not just how to provide enough direct daylight to an occupied space, but how to do so without any undesirable side effects. Beyond adding windows or skylights to a space, it involves carefully balancing heat gain and loss, glare control, and variations in daylight availability.

To implement daylighting into a project it requires systems, technologies and architecture. Below are some of the typical components that are utilized:

Daylight-optimized building footprint
Climate-responsive window-to-wall area ratio
High-performance glazing
Daylighting-optimized fenestration design
Skylights
Tubular daylight devices
Solar shading devices
Daylight redirection devices
Daylight-responsive electric lighting controls
Daylight-optimized interior design (furniture, space planning, room surface finishes)

Since daylighting components are normally integrated with the original building design, it may not be possible to consider them for a retrofit project. We are fortunate that the retrofit of our building in Boca Raton lends itself to use daylighting to positively impact two of the fundamental principles of sustainable design. Below are some of the components that our project will utilize:

Optimized Building Footprint – Although usually limited to new construction, our building and site enables us to make design decisions that will allow us to create a daylight-optimized footprint. The redesign of our building will maximize south and north exposures, and minimize east and west exposures. Our new façade will face due south which is the optimal orientation for best solar access and ease of control.
Climate-Responsive Window-to-Wall Area – With the building sited facing south, we are specifying high-performance glazing (windows). The area is being designed to be a careful balance between admission of daylight and summertime heat gain since our project is located in South Florida.
High-Performance Glazing – High performance windows will generally admit more light and less heat than a typical window, allowing for daylighting without negatively impacting the building cooling load in the summer. For our project, being located in South Florida, high performance glazing is very important.
Daylighting-Optimized Fenestration Design – An optimized fenestration design will increase the system performance. Windows have two essential functions in a building. 1) Daylight delivery or admittance, and 2) provide a view to the occupants. Daylight admittance requires a window with high visible light transmittance and windows for view need to be clear. Our daylighting fenestration design will be composed of both of these with correct height requirements.
Skylights and Tubular Daylight Devices – Both of these devices utilize what is called toplighting, or admitting daylight from above. We are incorporating the use of tubular devices in our building design. These devices employ a highly reflective film on the interior of a tube to channel light from a lens at the roof to a lens at the ceiling plane. They tend to be much smaller than a typical skylight, yet still deliver sufficient daylight for the purpose of dimming the electric lighting. They will be used on the second floor where there will be interior spaces that do not have access to any windows due to our north side zero lot line site.
Daylight Redirection Devices – Redirection devices take incoming direct beam sunlight and redirect it. These devices serve two functions: glare control, where the sun is directed away from the eyes of the occupants, and daylight penetration, where sunlight is distributed deeper into a space that would not be allowed otherwise. We will be utilizing both of these methods in our project. Lightshelves will be used on the south façade of the building, on both floors. The second floor interior will contain clerestory glass components that will distribute light into rooms that have no access to daylight.
Electric Lighting Controls – Lighting controls are essential to any daylighting system. No daylighting design will save any energy unless the electric lights are dimmed or turned off when there is sufficient illumination from daylight. If daylighting features such as windows and tubes are not paired with daylight-responsive dimming controls, then the daylighting-enhanced building will likely use more energy, not less, than a comparable building without any daylighting features. Lighting controls consist of continuous dimming or stepped-ballasts in the light fixtures, and photocells to sense the available light or turn off the electric lighting in response. We will incorporate a lighting control system in our building to take full advantage of our daylighting design and the energy savings it will provide.
Interior Design – An often-overlooked element in a successful daylighting design is the interior design. The interior design should consider furniture design, placement, and room surface finishes and how they relate to daylight performance. Interior walls may interfere with daylight transmission into a space. The south facing façade of our project, on the first floor will have an open concept so that daylight can penetrate and distribute more fully into the interior space. Walls and ceilings will be as reflective as possible.

To design and implement a daylighting strategy into a project requires a collaborative design process and the daylighting strategies must balance with other project design goals. Access to daylight inside buildings provides a healthier and comfortable environment for its occupants and is also linked to greater productivity. When designed with proper glare control and minimized solar heat gain, daylighting provides high-quality light while reducing energy use for lighting and for cooling.

http://www.wbdg.org/resources/daylighting.php

LEED Project Update – Build Better Codes

Posted on July 29, 2015July 30, 2015 by abrahamwien18

By Julie Lundin, NCIDQ, LEED AP ID+C, ASID
Founder, Director of LEED Process Management for Emerald Skyline Corporation

Emerald Skyline Corporation, in conjunction with Golden Spiral Design, is designing, renovating and repurposing an unoccupied industrial building located in Boca Raton, FL. This distinctive commercial building will include many sustainable features with the intent to obtain LEED (Leadership in Energy & Environmental Design) certification from the USGBC. LEED certification recognizes performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. It is a whole-building approach to sustainability which will enable us to save on utilities and maintenance while improving the well-being of our personnel and our clients.

LEED is a third party certification program and the nationally accepted benchmark for the design, construction and operation of high performance green buildings. The LEED Green building rating system encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria.

We continue to modify the design of the building in preparation for submission to the City of Boca Raton Development Services Department. In preliminary meetings with the Planning Department and Traffic Engineers it was determined that the building occupancy will require a minimum of 8+ parking spaces per the existing (dated) Municipal Codes. The limited space for parking on the site will make it difficult to meet these requirements.

Based on our plans intended use of the building, our parking needs for the building are much less than the codes require. Both Emerald Skyline and Golden Spiral employ sustainable business practices which encourages personnel to spend the majority of their time working remotely.

Boca Raton’s current parking requirement is not congruent with sustainable thinking which encourages “hotelling” or “hot desking”, the use of public transportation and alternate commuting methods such as riding a bicycle. In meeting with representatives the City of Boca Raton, they have indicated that they might help us on this initiative as they have special exemptions for sustainable buildings. Our goal is to have the minimum number of spaces necessary to satisfy our needs.

Further, as a LEED certified project, our design goals are to minimize paved surfaces as solid surfaces contribute negatively to our environment. Our vision is to utilize permeable pavers for the parking spaces we will have on-site. Here is why:

Permeable pavers help the environment by:

Improving the quality of storm water runoff as it is returned to a ground water source;
Providing a solution to soil erosion by allowing grass to grow within the spaces of the block and blend in with the surroundings.
Reducing or eliminating storm water runoff, decreasing flooding and relieving sewer system demands while still providing a sturdy surface for vehicle and pedestrian traffic; and
Reducing heat that is transmitted into the atmosphere from hot pavement by providing a vegetative and reflective surface.

Rating systems like LEED are critical proving grounds for building strategies that address an inclusive set of risks that require our attention beyond fire safety, disability access and other crucial areas.

Building codes have presented barriers to the application of more forward-looking technologies, materials and methods. Building green requires a multi-disciplinary approach to break down the walls between planning, design and construction. The existing codes have been a factor in the business-as-usual construction process. As the viability, cost-effectiveness, and many benefits of green building continue to prove their worth, code safety needs to evolve to incorporate a broader scope of responsibility that are now expected. We are hopeful that building codes, including those of Boca Raton, will begin to encompass sustainable building needs.

USGBC – Build Better Codes

http://www.usgbc.org/Docs/Archive/General/Docs18641.pdf

New Law to Allow Tenants to Showcase Their Energy Efficiency Efforts

Posted on May 21, 2015May 21, 2015 by abrahamwien18

By Robert Carr, National Real Estate Investor, 5/15/2015

{ View the original article here. }

Office tenants who became believers in energy conservation in the heyday of the building sustainability movement about two decades ago only to watch building owners take all the credit have cheered a recent new law that will support, track and promote their efforts at being green.

President Barack Obama signed the Energy Efficiency Improvement Act of 2015 on April 30. The bipartisan-sponsored law promises to align the interests of building owners and tenants with regard to investments in cost-effective energy efficiency and water conservation measures, create studies that will examine successful sustainable practices, enact data-tracking systems and provide ways to promote voluntary tenant compliance.

The law, also known as the “Tenant Star” act, includes a new federally-sponsored green building designation that’s similar to the U.S. Environmental Protection Agency’s (EPA) popular Energy Star system. Energy Star, enacted in 1992, provides an energy-efficient rating system for building products, residential homes and commercial buildings. In a recent report, the EPA said the Energy Star system reduced utility bills for residents and businesses by $34 billion in 2014.

However, tenants, the backbone of energy use in commercial buildings, have neither had a consistent national program to measure efficient energy use, nor a way to tout their specific efforts. Allison Porter, vice president of sustainability services for commercial real estate services firm DTZ, says tenants will now have the same kind of opportunities as Energy Star provides for owners to turn data into a basis for action. The new law will allow space occupiers to take responsibility for their usage and receive recognition for conservation efforts, she says.

“Although whole-building measures like Energy Star are a valuable tool, it’s also crucial to acknowledge that tenants’ use of a space has a huge impact on how a building performs,” Porter says. “By encouraging tenants to design and build energy-efficient spaces, Tenant Star will help align the interests of tenant and landlord. I expect that this alignment will clear a path for a new wave of investment in energy-efficient office space, especially coming at a time when the cost of efficient technologies commonly used in office interiors, such as LED lighting and occupancy sensors, has decreased significantly.”

Porter is joined by many other tenant sustainability supporters in her praise of the new law. Anthony Malkin, chairman, president and CEO of New York City-based Empire State Realty Trust Inc., said in a statement that the new law will align office tenants with their landlords to make smart, cost-effective investments in energy-efficient leased spaces. “Broad adoption will save businesses billions of dollars on energy costs in the coming years,” he said.

Jeffrey DeBoer, president and CEO of the Washington, D.C.-based Real Estate Roundtable, which brings together commercial property owners, developers and managers to address national policy issues, called the legislation “a triple win that will spur the economy by creating jobs, enhancing energy security and preserving our environment by cutting greenhouse gases.”

Implementation

The General Services Administration (GSA), responsible for all federal government leasing in the country, will take responsibility for the first section of the law, also known as the Better Buildings Act of 2015. According to the act, the GSA will create model commercial leasing provisions for energy efficiency by Oct. 31, and may begin enacting these provisions in federal leases. The GSA will also publish these provisions and share them with state, county and municipal governments.

The Secretary of Energy is responsible, under this law, to create a study within one year on the feasibility of significantly improving energy efficiency in commercial buildings through design and construction, by owners and tenants, of spaces that will use energy efficient measures. The study will include, among other requirements, such metrics as return on investment and payback analyses, comparisons of spaces that use these measures and those that don’t, impact on employment and actual case studies and data on the spaces where these measures are implemented. The department will start seeking input on this study after Aug. 1.

In addition, to allow tenants to start touting their green policies, the EPA will create the Tenant Star designation as an offshoot of Energy Star. Not only will tenant data be added into the 23-year-old collection program already in place, the new designation will recognize tenants in commercial buildings who voluntarily achieve high levels of energy efficiency in their leased spaces. The EPA will also create a voluntary program to recognize owners and tenants that use energy efficiency in designing and creating new and retrofit space.

Al Skodowski, director of sustainability with commercial real estate services firm Transwestern, says this new law will help those companies that have been fully engaged in driving green practices for many years.

“The birth of Tenant Star, as another tool to help our tenants understand their use, reduce energy consumption and to save money, is a very exciting opportunity that will help us continue to improve efficiency in the industry,” he says.

Sustainable Building Design

Posted on May 19, 2015May 21, 2015 by abrahamwien18

By Julie Lundin, LEED AP ID+C,
Principal, Emerald Skyline Corporation

Our project in Boca Raton is being designed to become a LEED certified building. The U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) green certification system is a tool for evaluating and measuring achievements in sustainable design. LEED consists of a set of perquisites and credits with specific requirements for obtaining points in order for a building to become LEED certified.

Many people are not familiar with the concept of sustainable design and how it relates to building construction and ongoing building operations. The built environment impacts our natural environment, our society and our economy. This concept is often referred to as the 3 P’s, people, planet and pocketbook. Sustainable design attempts to balance the needs of these areas by integrating design solutions.

EPA 2004

The main objectives of sustainable design are to reduce or avoid depletion of natural resources such as energy, water, and raw materials; prevent environmental damage caused by buildings and their infrastructure; and create livable, comfortable and healthy interior environments.

Sustainable design does not just apply to new construction; retrofitting of existing buildings should be an option and can be more cost-effective than building a new facility. With our project, we opted to retrofit as well as reposition an existing building rather than allowing further decay of the property or demolishing it and building new. My future posts will focus on specific details and products that we will utilize in our sustainable design process.

While the definition of sustainable building design continues to evolve, according to the Whole Building Design Group (WBDG) Sustainable Committee there are six fundamental principles that persist. References to some of our sustainable design solutions that will be written in upcoming posts are included below in the fundamental principles.

Optimize Site Potential

Creating sustainable buildings starts with proper site selection, including the reuse or rehabilitation of existing buildings.

We chose a contaminated site and remediated the property.
The project is an abandoned auto body garage that will be repurposed rather than demolished.

Location, orientation, and landscaping of a building affect ecosystems, transportation methods, and energy use.

A south facing orientation will enable us to harness solar energy and utilize the sun for daylighting within the structure.
Proximity to major bus and train lines provides alternative transportation.
The use of native plants and rainwater collection

Optimize Energy Use

It is essential to find ways to reduce energy load, increase efficiency, and maximize the use of renewable energy resources.

Solar energy via solar panels
LED lighting
Daylight Harvesting
Energy efficient windows, appliances, and HVAC

Protect and Conserve Water

Fresh water is an increasingly scarce resource; a sustainable building should use water efficiently, and reuse or recycle water for on-site use.

Cistern and water collection
Low flow toilets, sinks, and appliances
Grey water use where allowed

Optimize Building Space and Material Use

Available resources are stressed to due demands for additional goods and services. A sustainable building is designed and operated to use and reuse materials, environmentally preferable materials have a reduced effect on human health and the environment.

Shared uses for small building space
Low VOC paints, sealants and adhesives
Use of reclaimed wood

Enhance Indoor Environmental Quality (IEQ)

The IEQ of a building has a significant impact on occupant health, comfort, and productivity. A sustainable building maximizes daylighting, has appropriate ventilation, moisture control, optimizes acoustic performance, and avoids the use of materials with high-VOC emissions.

Low VOC paints, sealants and adhesives
Flush out building before occupancy
Thermal Comfort Control
Provide quality views

Optimize Operational and Maintenance Practices

Encourage optimal operations and maintenance systems during the design and development phases, specify materials and systems that simplify and reduce maintenance requirements; require less water, energy and toxic chemicals. Include meters to track sustainability initiatives, reductions in energy and water use and waste generation.

Energy and water metering
Recycling Waste Plan
Building Envelope Commissioning

Utilizing a sustainable design philosophy encourages decisions at each phase of the design process that will reduce negative impacts on the environment and the health of the occupants, without compromising the bottom line. It is an integrated, holistic approach that encourages the balance of people, planet and pocketbook. An integrated approach of sustainable design should positively impact all phases of a building, including design, construction and operation.

Sources:

http://www.wbdg.org/design/sustainable.php

http://www.gsa.gov/portal/content/104462

Going green – Fifty free or low cost ways for commercial property owners, managers and tenants to begin

Posted on May 19, 2015 by abrahamwien18

By Paul L. Jones, CPA, LEED Green Associate,
Principal, Emerald Skyline Corporation

Commercial properties consume approximately 20% of the total energy used by the United States. We also know that commercial buildings consume a large portion of water, produce greenhouse gas emissions and generate significant waste. Further, we know that building owners and managers will seek to reduce energy and water consumption as well as greenhouse gas emissions and waste that is taken to a landfill (or the ocean) in order to save on operating expenses and improve the marketability of their property. But, we also know, owners and managers are budget conscious and want to time replacements with the deterioration or functional obsolescence of their systems and equipment.

So, what can an owner, manager or tenant do?

Good news. We have done the research for you and assembled a host of ideas and tips on free or low cost ways to start you on the Path to Sustainable Benefits (Please note that all figures and percentages are approximate and based on published sources; your results may vary):

Reduce, reuse and recycle

Implement a recycling program (be sure to check local recycling and waste reduction guidelines for materials that are eligible to recycle);
Establish a location in the building to recycle used batteries, toner cartridges and miscellaneous hazardous products and partner with a charitable organization to donate used toner cartridges, batteries and other products,
Set up a cell phone recycling drive (contact ReCellular) or partner with a charitable organization to donate used cell phones.
Recycle old or unused furniture whenever
Post signs in production rooms, mail rooms and kitchens as a reminder to reduce, reuse and recycle and the 3 Include information in new tenant welcome packages.
Purchase refurbished or environmentally-friendly new furniture.
Source locally-manufactured/produced products to lower transportation and delivery costs.
Encourage and educate building management personnel and tenants on how they can improve their recycling efforts including:
- Provide individual paper recycle bins or cardboard boxes at each desk,
- Provide recycle bins at each copier/printer/fax (more bins than trash cans increases use),
- Reuse shipping boxes in the mailroom and use shredded waste paper as packing material,
- Switch to refillable pens and pencils made from recycled materials,
- Use envelopes a second time with a new address label,
- Encourage staff who cannot recycle certain items at home to bring these to the office for recycling,
- Establish a common space for reusable office products,
- Establish a policy that employees shut down their computers when leaving for the day (“standby” draws power when not in use),
- Turn off devices besides fax machines that are not in use afterhours before leaving the office,
- Utilize remanufactured/recycled toner cartridges for printers and fax machines,
- Save paper with the blank side to b used for scrap/scratch/drafts (reuse) before recycling,
- Encourage printing on used paper if one side remains clean (use old reports from exiting or outdated hardcopy files to print new data for updated files),
- Use document scanning and email technology to reduce printing of documents,
- Encourage employees to read email and files without printing,
- Set up and use electronic filing rather than a paper filing system,
- Take the time to redirect undelivered mail with “no longer at this address” written on the envelope,
- Contact advertisers directly to quit sending unsolicited marketing and catalog products,
- Notify staff who receive unwanted mail to be removed from mailing lists by contacting Mail Reference Service, Direct Marketing Association, P.O. Box 3861, New York, NY 10163-3861,
- Use ceramic/glass dishware to reduce wasted paper, plastics and foam cups, and
- Discontinue the use of individually-bottled water.
- Use on-demand printing processes rather than push printing that requires bulk ordering of marketing materials (e.g. brochures).

Conserve Energy

Benchmark energy and water consumption through ENERGY STAR^® Portfolio Manager.
Perform regular energy audits to identify opportunities for cost-effective energy reduction. Remember to perform midnight evaluations to make sure lighting and HVAC are not running when the building is unoccupied.
Make sure a/c vents, heaters and radiators are unobstructed by office furniture.
Understand your energy bills and consult your energy supplier(s) to understand the billing rates and any peak-time charges and how they be reduced or avoided.
Adjust the thermostat to be one degree higher during the cooling season and one degree lower during the heating season;
- Reduce the thermostat in unoccupied rooms or in busy concourse spaces and corridors where people move quickly through anyway
Set thermostats to energy-efficient heating/cooling levels during weekends and evenings,
Inspect all thermostats semi-annually to ensure that they are working properly,
Adopt on-demand HVAC,
Ensure switches are labeled so tenants and staff are aware of switches that are relevant for use and won’t be switching on too many appliances or too much lighting.
Leaving the lighting in vacant spaces off except during use and encourage tenants to turn off lights when departing a conference room or unused space (Better yet: install occupancy sensors (timers are another option) which ensures that even occupied spaces are lit when there is a person the room and off when vacant, further reducing energy consumption;
Install solar shades to block heat.
Switch to day cleaning so lights can be turned off at night rather than at 2:00 am when the cleaning crew is done.
Establish a pro-active HVAC systems and building envelope maintenance programs. Something as simple as replacing worn door seals can cost around $100 per doo, but lead to thousands of dollars in annual savings;
As lightbulbs are replaced, use LED bulbs to help reduce energy consumption;
Install VFD (Variable Frequency Drive) on pumps and water features which minimizes energy use during low demand times;
Vending machines carrying non-perishable items can be set on a timer or switched off during non-work hours (nights and weekends) when the building is closed.
Power flushing your central heating system can reduce fuel wastage by a third as it can remove undesirable corrosion residues, replace aggressive water, quickly restoring circulation, efficiency, and increase the lifespan of your system.
Institute a tenant energy awareness program – use your company newsletter and/or building announcements to keep tenants and their employees informed about energy management goals and how they can help.
- Provide tenants with energy saving tips
- Recommend that tenants keep the blinds in the office closed (or almost closed) during peak sun hours and especially on weekends,
- Recommend that building occupants avoid placing lamps near the thermostats in your space (heat generated by the light causes the HVAC to turn on when not needed to cool the entire office),

Conserve Water

27. Install aerators on faucets (especially in older buildings) to reduce the demand for hot water;

28. Put water heaters on a timer that shuts them off at night and on weekends and add water heater blankets,

29. Insure all hot water piping, including water return piping, is insulated which reduces the amount of time the user waits for hot water and ensures warmer water will be returned to the water plant.

30. Place cistern displacement devices in toilets to reduce flush volume.

31. Use dyes to check and fix toilet cistern leaks.

32. Use native or drought-tolerant plants and landscaping;

33. Use reclaimed water (through the use of rainwater harvesting tanks), irrigation sensors, timers and green products for landscaping, common area amenities and pest control.

34. Add a rain sensor designed to identify when precipitation is present and lock-out a controller so it does not run its program and irrigate when watering is unnecessary. After the rain event, the sensor automatically resets, allowing the controller to resume its schedule without losing any program information.

Indoor Environmental Quality

35. Use sustainable cleaning products and building materials for any tenant improvements or repairs;

36. Have cleaning crews use mircrofiber towels for cleaning rather than wasteful paper towels.

37. Replace bathroom paper products with recycled or post-consumer content paper.

38. Use high-efficiency HVAC filters and change them often.

39. When repainting an area, require the use of low VOC paint or paint that meets Green Seal 11 standards.

40. Paint work areas in lighter colors and use brighter surface design materials to maximize the effect of natural lighting.

41. Ensure remodeled include environmentally-friendly or recycled carpet.

42. Use a plant service to promote clean air and natural cooling.

43. Encourage tenants to position desks closer to natural light to reduce the onset of seasonal depression (aka SAD).

Transportation

44. Provide incentives, such as free or preferred parking, for building occupants who carpool.

45. Create a message board (either digital or physical) where building occupants can sign-up and find carpool mates.

46. Provide preferred parking for building occupants who drive low emission, fuel-efficient vehicles.

47. Encourage the use of public transportation

48. Provide bicycle storage to encourage building occupants to ride their bikes to work.

49. Hold long-distance meetings via NetMeeting, Live-meeting or other services.

50. Install electronic vehicle chargers