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, CPM Vice Chair, BOMA International Managing Partner, Operations Carr Properties Washington, DC

BOMA: Achieving High Performance Through Innovation 1575 Eye Street, NW Washington, DC ,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 efficiency o Achievement of sustainability goals. Energy Star rating of 85 Income/fee enhancement Job preservation (20 positions) Tenants Consistency of workplace environment o Achievement of sustainability goals Greater employee productivity Reduction in gross rent payments