Martha Paschal Managing Director, Capital Markets Malachite LLC © 2011

 Expert, multi-disciplinary support for green building projects and portfolios  DC PACE: Coordinating PACE for Multi-family Program design, lender, owner, resident outreach/education Our Skills:  Finance and investment  Retrofit and development project management  Portfolio and asset management  Leasing and operations support  Green certification  Policy and program development and research

$1 in home energy savings typically adds… $20 home sale price premium Lawrence Berkeley National Laboratory, April 2011

 Physical Plant considerations ◦ Watch system developments, lifecycle paybacks, items missed during rehabs  Financing Partner Considerations ◦ Lien priorities, partner capital accounts, property operating metrics, funding opportunities as they present themselves Timing Considerations ◦ How close is the property to Year 15? Will system upgrades work better within LIHTC refinancing or as a standalone?  Owner Considerations ◦ Complications of retrofit programs, owner overhead, utility system configuration, ability to achieve lower utility allowance -> net rent increases from housing agencies  Resident Considerations ◦ Resident training on new systems, energy efficiencies which can benefit resident bottom-line

Available Now  Fannie Mae/ FHA Risk- Sharing – “Green Refinance Plus”  Fannie Mae  FHA Pilot under discussion  Freddie Mac DC PACE

 Energy Efficiency Financing Act of 2010 (authorizing legislation)  Commercial/multi-family program in planning stage  DC will issue up to $250 million in revenue bonds to raise energy retrofit financing funds  Properties will opt in voluntarily to apply for retrofit loans  Uses for loan proceeds will include: Insulation; HVAC; weather stripping; caulking; EE lighting; daylighting; meters; control systems; renewables  Loan repayment reduced by realized energy savings

Codes  ASHRAE (2010): first green building code  IECC 2012: newest energy conservation code (30% more efficient than 2006) Standards  ASTM BEPA, 2011: new foundation energy audit standard  ASHRAE 100, revisions in completion, 2011: energy benchmarking and audit  ISO 5000, 2011: international commercial/industrial energy production and management 7

 Green, energy-efficient buildings produce superior financial performance: Energy savings, higher rents and occupancy rates, stronger sales prices.  Energy-efficient retrofits often produce strong payback results.  New codes, standards should lead to new financing opportunities Market standardization Easier/cheaper implementation  Most energy retrofit progress to date has been in the office sector, but multi-family financing options increasing. Fannie Mae, FHA  DC PACE program will have a multi-family retrofit component 8

Martha Paschal Managing Director, Capital Markets Malachite LLC