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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%.
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