A Business Case for Multi-Tenanted

Office Buildings

Creating a Win for

Owners, Managers and Tenants

BOMA: Achieving High Performance Through Innovation

Richard W. Greninger, CPMVice Chair, BOMA InternationalManaging Partner, Operations

Carr PropertiesWashington, DC

BOMA: Achieving High Performance Through Innovation

1575 Eye Street, NWWashington, DC 20005

• 210,655 sq. ft.

• 2 level garage with

203 spaces

• Built in 1979

• Owners: 1575 Eye St LP American Society

of Association Executives

AETNA Carr Properties,

Managing Partner

Occupancy Profile / Major Tenancy

BOMA: Achieving High Performance Through Innovation

• American Society of Association Executives (ASAE)

40,516 sf (20%)

• Veteran’s Affairs (VA) 63,798 sf (30%)

• Federal Aviation Administration (FAA)

54,942 sf (26%)   

o 76% of the building occupied by three tenants  

o 56% expiring leases in 2010 and 2011 (VA and FAA)

Energy Efficiency Retrofit Profile

BOMA: Achieving High Performance Through Innovation

• Replaced two chillers totaling 550 tons with two high efficiency chillers & replaced two cooling towers with new high efficiency towers, reduced from four fans and four motors to two fans controlled by a VFD

• Replaced domestic water boost pumps with new high efficiency booster pump system with VFD’s

• Installed soft start on central plant supply and return fans to control peak demand

• Replaced 10-ton elevator lobby unit with high efficiency unit

Energy Efficiency Retrofit Profile

BOMA: Achieving High Performance Through Innovation

• Complete building lighting retrofit from F-40’s to T-8 lights, also installed sensors in all public restrooms and replaced light switches with motion control during new tenant build outs

• Demand Management Installed energy modeling/management system and

upgraded building-wide EMS system to “state of the art,” and incorporated Constellation Demand Response Program.

• Supply Management Renegotiated electric supply contract with Constellation

Energy, reducing cost 25%.

BOMA: Achieving High Performance Through Innovation

High Performance ROI

BOMA: Achieving High Performance Through Innovation

• Energy Efficiency Retrofit Cost $ 963,000

• Annual Reduction in Electric:• Consumption 1,056,246 KWH (21.5%)• Cost Savings (2012) $ 220,000

• Annual R&M Savings $ 20,000

• Annual Rental Revenue (VA & FAA) $ 5,471,881

• Total Savings $ 5,711,881

• Payback Ratio (Total) $ 963,000 / 5,711,881 = 2.1 mth

• Payback Ratio (Energy Only) $ 963,000 / 240,000 = 4 years

Benefits

BOMA: Achieving High Performance Through Innovation

Owners

•Retained 56% of tenancy preserving $5.5 million in gross income•Long-term viability of investment

o GSA and Class A tenancy evaporation •Instantaneous payback of investment and value enhancement•Projected $15,000,000 value gain (Revenue and Cap-rate improvement)•Achievement of sustainability goals

Benefits

BOMA: Achieving High Performance Through Innovation

Managers

•Operational performance efficiencyo Achievement of sustainability goals. Energy Star

rating of 85•Income/fee enhancement•Job preservation (20 positions)

Tenants

•Consistency of workplace environmento Achievement of sustainability goals

•Greater employee productivity•Reduction in gross rent payments