Exclusive design/build techniques in commercial office, hospitality and healthcare

1. The value of your building tomorrow, may depend upon your commitment to
sustainability today.

2. User Effective® Real Estate forFree!
• 10’ x 10’ cubicle or 100SF
• $20 per foot or $2,000 annual rent
• Joe makes $50,000 annually
• Daylight and thermal comfort
increase Joe’s productivity by 4%
• 4% x $50,000 = $2,000 savings
• UE features pay great dividends
10’
10’

3. Daylight Harvesting
Adaptable Workplace
Privacy
Under Floor Air
Interior Light Shelves
Task Lighting
Exterior Sunshades
Clerestory Windows
Tinted Low-E Windows
Raised Floors
Noise Control
User-Effective®Benefits

4. User Effective® Elements
• Thermal Control – 5.5% (20 studies)
• Privacy & Interaction – 10.9% (24)
• Ergonomics – 33.3% (70+)
• Land Use & Mobility – MU/TOD, et al
• Systems Flexibility – Plug & Play
• Interior Space Planning – >80% loss
Reprogrammable - UFAD, Moveable walls

5. Cost / Benefit Analysis
CBA: Mechanical Engineering Example
• List of Sustainable Technologies
• Scope and Price Technologies
•Organize into a Cost/Benefit model
• Determine Categories offsetting Benefits
• Analyze Cost/Benefit relationships

6. Get the best return on your investment
688 158 22 77 297 97
6300
0
1000
2000
3000
4000
5000
6000
7000
Lifecycle Costs
over 20 years
Building Alterations Moves Telephone Computers O&M Salaries

7. Calculating Economic Benefits
• Reduces operating costs
• Decreases vacancy, improves retention
• Marketing advantages & free PR
• Optimizes life-cycle economic performance
• Improves productivity
• Reduces absenteeism and turnover
• Providing a healthy workplace improves employee satisfaction
• Reduces liability & compliance risk
• May Increase building valuation (cap rate)

8. Quantifying “Green” Economic Benefits
The (4)-categories of benefits to Owner with
relative economic value shown as an Environmental
Credit (multiplier):
• Marketing & PR = $0.14/SF
• Operating Expenses = $2.00/SF
• Turn-Over / Maintenance = $0.55/SF
• Obsolescence / L-T Value = $0.56/SF
•Total Potential Economic Benefit = $3.25/SF

9. Enhanced Marketing & PR :
$0.25/SF Annual Expense
5% Marketing / PR Enhancement
$0.0125 / 0.09 Capitalization Rate
$0.14 Benefit Offset to Initial Costs
Reduced Operating Expenses :
$1.80/SF Annual Utility Expense
10% Enhancement of Utility Efficiency
$0.18 / 0.09 Capitalization Rate
$2.00 Capitalized Benefit

10. Reduced Capital / Maintenance:
$15/SF Average Turn Cost = $1.50/YR
5% Offset in Tenant Turn-Over
$.075/YR / 0.09 Capitalization Rate
$0.83 Benefit Offset to Initial Costs
$0.25/SF Annual Maintenance Expense
10% Increase in Maintenance Burden
$.025/YR / 0.09 Capitalization Rate
$0.28 Increased Burden
$0.55 Net Benefit to Offset Initial Costs

11. Reduced Obsolescence =
Extended Long-Term Value:
$0.50/SF Annual Capital Reserves
5% Reduction in Capital Requirements
(Better Systems / Increased Maint. Burd.)
5% Extended Asset Life (Offset Obsol.)
$0.05 / 0.09 Capitalization Rate
$0.56 Benefit Offset to Initial Costs

12. Worker Productivity :
$40,000/YR Salary
200-SF / Employee
$200/SF Annual Salary Burden
0.25% Increase
$0.50/SF/ per Yr. / 0.09 Cap Rate
$5.56 Benefit Offset to Initial Costs
Sales Revenue :
$300/SF Annual Sales
0.25% Increase in Sales
$0.75 / 0.09 Capitalization Rate
$8.33 Benefit to Tenant
(% Rent to Owner)

13. The (6)-categories of Benefits to the Owner
and Tenant :
• Marketing & Public Relations = $0.14/SF
• Operating Expenses = $2.00/SF
• Turn-Over Burden / Maintenance = $0.55/SF
• Obsolescence / Long-Term Value = $0.56/SF
• Worker Productivity = $5.56/SF
• Sales Revenue = $8.33/SF
• Total Benefit: $17.14/SF

14. What if Cap Rates areLower for LEED Certified
Assets?!
50,000-SF building at $18.00 NNN Rent
$900,000 Net Operating Income
$10,000,000 Value @ 9% cap rate
$11,250,000 Value @ 8% cap rate
11.25% Increase in Value b/o cap rate
Per Davis Langdon 2007 report Cost of
Green Revisited, 1.9% increase in cost will
cover premium to achieve LEED-Gold
Can you risk not pursuing LEED certification?!