Bridging the Owner-Tenant Divide to Unlock New Energy Savings - PowerPoint Presentation

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Bridging the Owner-Tenant Divide to Unlock New Energy Savings

Monday, June 24, 2019: 4:00 PM - 5:00 PM

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Speakers

Craig Haglund

US EPA

ENERGY STAR

Marta Schantz

Urban Land Institute

Eric Duchon

LaSalle Investment

Management

Eric Tilden

Cushman & Wakefield

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The Owner’s Perspective

Eric Duchon, LaSalle Investment Management

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LaSalle Investment Management

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Asset Level ESG Integration

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Tenants want Sustainability

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…Even Industrial Tenants

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ENERGY STAR Tenant Spaces

Craig Haglund, US EPA

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Why ENERGY STAR Tenant Recognition?

ENERGY STAR’s objective measure of whole building efficiency has motivated change in the market, but barriers remain, especially in multi-tenanted buildings

Tenant activity often accounts for the majority of energy use in multi-tenanted buildings

Efficiency can save tenants money, directly or indirectly

Recognition highlights leaders, who show the way for everyone else

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Energy Efficiency Improvement Act of 2015

Directed EPA to develop recognition for energy efficient commercial tenant spaces

Design & Construction (D&C)

To be proposed after DOE study on feasibility of high performance design and construction in tenant spaces

Study published April 30, 2016Occupancy-Based

Modeled on 1-100 ENERGY STAR score for whole buildingsRequires data collected by Energy Information Administration, available 2021 at earliest

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2017-2018 Pilot

EPA proposed recognition criteria in 2016, and launched pilot for office spaces in summer 2017

Office tenants only

Broad and diverse group of Charter Tenants

Over 140 spaces, and 70 organizations

Represent 25 states, plus DC and Puerto Rico

Include occupied tenant space, as well as in design and build/fit-out

On June 12, 2018, EPA announced recognition for 51 Charter Tenant spaces

2,000

sq’ to over 1.3M

sq

’

15 states

16

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Automatic Controls Company, Inc.

CodeGreen

Solutions

COOKFOX Architects

CRB

Cushman & Wakefield

DOE Office of Legacy Management

DNV GL Energy

Empire State Realty Trust HQ

Event Network, LLC. Forest City Realty Trust, Inc.

Harvard Pilgrim Health Care

Hines (East & Midwest Regions)

HKS, Architects

HNTB Corporation

JCDecaux

JLL

JPMorgan Chase

Kilroy Realty Corporation

LaSalle Investment Management

Legrand NA

LinkedIn

MG2 Corporation

Morgan Stanley

Related Companies

Robert A.M. Stern Architects

Rocky Mountain Institute

Salesforce

Samsung Electronics America

Satori Energy

Servidyne

, LLC

Shorenstein

Skanska USA

TowerPinkster

USAA Real Estate

Ventas, Inc.

Verizon

Vornado Realty Trust

Wells Fargo

Zeal Optics

Charter Tenants

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Criterion

Value

 

Pilot Requirement and Results

Estimate Energy

Establish practice; placeholder for eventual benchmark

 

Use pilot-scale web tool (developed in collaboration with DOE)

Worked well for pilot; needed to refine calculations and update analysis

Meter

Enables measurement and ability to track improvement 

Verify meters in place

Worked well; more guidance needed

Light Efficiently

Key way tenants can reduce energy use; performance-based metric

 

Conduct lighting inventory and test pilot-scale web tool

Additional analysis and testing of metric needed

Use Efficient Products

Plug load is growing energy use; many high efficiency options

 

Complete equipment inventory

Assessing option; inventory was just for pilot, to gather data

Share Data

Allows whole building benchmarking, landlord engagement

 

Create Portfolio Manager account

Worked well

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Criterion

Full Program Requirement

 

Estimate Energy

Tenant must input space characteristics into full-scale web tool to create energy estimate

No performance threshold 

Meter

Tenant must meter all energy they are responsible for in building

Includes lighting, plug-load, supplemental HVAC (if applicable), data center (if applicable)

Meters must be +/- 2% accuracy

Light Efficiently

Tenant must conduct lighting inventory of their space, and input information on a suite by suite basis into the tenant tool.

Tenant must have estimated Lighting Energy Use Intensity (LEUI) at or below Target LEUI, which is based off of previously entered space characteristics. Requirement is based on weighted average of entire tenant space.

Use Efficient Products

Tenant must provide proof of a procurement policy, indicating purchase of energy efficient equipment. Examples: Green lease, corporate policy, TBD

 

Share Data

Tenant must agree to share energy data with landlord upon request

 

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Sample Property

Sample Tenant Space

Tenant interface embedded within

Portfolio Manager.

Building Information added, followed

by tenant space on a suite by suite basis.

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Sample Tenant Space

Sample Tenant Space

Adding suite characteristics.

Adding equipment information. Used for both energy estimate and equipment requirements

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Sample Tenant Space

Sample Tenant Space

Adding lighting inventory Need to know fixtures, wattage, and controls

Summary page details individual suite results.

Option to apply for recognition

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Sample Tenant Space

All suites listed in table for tenant space “home page”

Option to apply appears once all criteria are satisfied

Application can be generated.

Licensed Professional (PE or RA) needs to perform site visit and sign off

Sample Tenant Space

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Tenant Energy Optimization Program (TEOP)

Marta Schantz, Urban Land Institute (ULI) Greenprint

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ULI Greenprint: “Reducing Carbon, Building Value”

Worldwide alliance of

leading real estate owners and financial institutions

committed to improving the

environmental performance

of buildings

Founded in 2009

Member-driven initiative with the

goal

of reducing greenhouse gas emissions by 50% by 2030

Includes ~

30 companies

representing 8,000 properties totaling 164 million square meters across

28 countries

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ULI Greenprint Members

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Annual Tenant Expenses ($/Square Foot)

$300

$30

$3

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Tenant Efficiency Programs in the Market

Tenant Energy Optimization Program

ENERGY STAR for Tenant Spaces

Green Lease

Leaders

Landlord-Tenant Energy Partnership

LEED ID+C & WELL Standards

Fitwel

Certification

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Tenant Energy Optimization Program (TEOP)

Free and open program

A returns-driven, 10-step process to embed energy efficiency decisions into tenant space design and construction

Piloted in 10 tenant fit-outs, documented in case studies

Energy savings of 30 – 50%Payback period of 3 – 5 years

Average IRR of 25%

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Creating Business Value

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The 10-Step Process: Phase I - PRE-LEASE

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What is a Green Lease?

Reduce energy use:

from 11-22%

Reduce utility bills:

up to $0.51 / ft

2

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Example Green Lease Clauses/Provisions

“Landlord and tenant shall provide a point of contact to discuss issues related to sustainability and energy. Issues include, but not limited to retrofit projects, billing issues, energy efficiency upgrades, and data access.”

“Any and all Tenant Improvement Work and/or Alterations will be performed in accordance with Landlord sustainability practices that the Tenant has accepted as part of the lease agreement, namely the leased space fit-out must meet Environmental Protection Agency’s ENERGY STAR Tenant Space criteria.”

Sustainability POCs

Minimum Efficiency Fit-Out

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Green Lease Leader Credits

1. Track tenant space energy use

2. Track tenant space water use

3. Request whole-building ENERGY STAR score from landlord annually

4. Ensure transaction management team receives energy training5. Implement tenant energy management best practices

6. Purchase on-site renewables if offered by landlord and competitively priced7. Accept cost recovery for efficiency upgrades benefitting tenant

8. Include requests for energy information in Site Selection Questionnaire9. Demonstrate innovation in leasing

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The 10-Step Process: Phase II - DESIGN & CONSTRUCTION

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The 10-Step Process: Phase II - DESIGN & CONSTRUCTION

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The 10-Step Process: Phase III - OCCUPANCY

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TEOP Helps Prepare for DOE “Green Lease Leader” and EPA “Tenant Star” Recognition

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TenantEnergy.ULI.org

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The Tenant’s Perspective

Eric Tilden, Cushman & Wakefield

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GLOBAL OCCUPIER SERVICES

Strategic consulting

Portfolio administration

Transaction management

Project and development services

Integrated facilities management

CAPITAL MARKETS

Investment sales

Equity, debt, and structured finance

Corporate finance and investment banking

VALUATION & ADVISORY

Appraisal management

Diligence advisory

Dispute analysis and litigation support

Financial reporting

Property tax services

Valuation/Portfolio valuation

PROJECT & DEVELOPMENT SERVICES

Program, project, and construction management

Development services and master planning advisory

Procurement and bid management

Schedule and budget management

Cost consultancy and value engineering

Space and occupancy planning

Sustainability

Workplace consultancy

INVESTMENT & ASSET MANAGEMENT

Segregated portfolio management

Asset management

Fund creation and management

Indirect investing

Fund investment strategy

TENANT REPRESENTATION

Strategic consulting

Occupancy workplace strategy

Acquisitions, dispositions, and build-to-suits

Market, demographic, and labor analysis

Lease restructuring; subleasing services

Lease auditing

AGENCY LEASING

Strategic asset analysis

Comprehensive property positioning

Broker relationship campaigns

Prospective tenant analysis and canvassing programs

Letter of intent and lease negotiation

Regular client reporting

Coordination of additional real estate services

ASSET SERVICES

Engineering and maintenance

Accounting and financial reporting

Contract and vendor maintenance

Lease compliance and administration

Property management

Construction management

Strategic account management

Sustainability

FACILITY SERVICES

Janitorial

Maintenance

Critical environments

Landscaping

Office services

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Sustainable Procurement

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DO IT DURING FITOUT

PRE-DEVELOPMENT

OCCUPANCY

DEVELOPMENT

Site/Space Planning

Goal Setting

Concept Design

Information Accessibility

Final Design

Coordination

Construction

Dashboard Development

Operations and Reporting

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SOFT

COSTS

FIT OUT

FURNITURE

LOW

SOFT

COSTS

FIT OUT

FURNITURE

MEDIUM

HIGH

SOFT

COSTS

FIT OUT

FURNITURE

8%

66%

16%

9%

58%

18%

10%

52%

20%

10%

A/V, IT

MOVE

A/V, IT

MOVE

A/V, IT

MOVE

15%

18%

$7.20

$59.97

$14.76

$9.17

$12.54

$76.58

$23.32

$20.74

$18.75

$95.12

$36.75

$33.51

DC FITOUT COST BREAKDOWN

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LEED V4.1 INTERIORS

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REAL-TIME TENANT METERING

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REAL-TIME TENANT METERING

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“selected submetering solution easy to deploy”

REAL-TIME TENANT METERING

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LIGHTING RETROFIT

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PROPERTY

ENGAGEMENT

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KNOW YOUR TENANTS

KNOW YOUR OWNER

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LEASE HOURS VS PHYSICAL OCCUPANCY

DELAYING OUTSIDE AIR

HVAC AFTER HOURS ON DEMAND

TEST YOUR AIR TEMPERATURE LIMITS

HOW HOT IS YOUR HOT WATER

MAKE IT COMPETETIVE

TEST YOUR LIMITS

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XYZ Building’s current ENERGY STAR score:

75

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BE AN ENERGY HERO!

POWER IT DOWN.

AAA IS TRYING TO SAVE ENERGY.

YOU CAN HELP BY TURNING THIS OFF AT NIGHT

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Thank You

Craig Haglund

US EPA

ENERGY STAR

Marta Schantz

Urban Land Institute

Eric Duchon

LaSalle Investment

Management

Eric Tilden

Cushman & Wakefield

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