1. San Francisco’s Green Building Ordinance: The New LEED Gold Standard a BOMA Lunch Workshop October 8, 2008 Presented by: Steven Ring StevenRing@cushwake.comStevenRing@cushwake.com Director, Cushman Wakefield Presented by: Bill Groth BGroth@bccionst.comBGroth@bccionst.com Senior Vice President, BCCI Construction Presented by: David Longinotti dlonginotti@hansonbridgett.comdlonginotti@hansonbridgett.com Partner, Hanson Bridgett LLP

2. October 8, 2008 Overview LEED Primer Green Building Ordinance Analysis Market Impacts Landlord Strategies LEED CI Buildouts Leasing Issues Questions

3. October 8, 2008 LEED Basics USGBC Performance Rating System Portfolio of certifications Building Certification Professional Accreditation

4. October 8, 2008 LEED NC, CI and EBOM LEED NC: New construction; 7 prerequisites, 69 total points LEED CI Commercial Interiors; 6 prerequisites, 57 total points LEED EBOM, Existing building operations and maintenance, 6 prerequisites, 92 total points

5. October 8, 2008 Green Building Ordinance: Benefits and Costs Projected Reductions by 2012  60,000 tons in CO2 emissions  220,000 megawatts in energy consumption  100 million gallons in drinking water Projected Costs  20 year average annual cost to the City’s economy of between 30 Million and 700 Million Dollars

6. October 8, 2008 Scope 57% of SF Construction Industry New Hi-Rise and Mid-Rise Commercial Large Commercial Interiors High-Rise, Mid-Rise and Small Residential Major Alterations to Existing Buildings Laboratories Excluded

7. October 8, 2008 Phased In Requirements- Commercial

8. October 8, 2008 9/24 DBI Administrative Bulletin Applicability  mixed use occupancy Permit Gatekeeper Ordinance  timing of submittals “Shadow” LEED Certification Noteworthy Provisions

9. October 8, 2008 Noteworthy Provisions, cont’d Requires attainment of specific LEED Points Increased points required for both demolitions and increased occupancy loads Certificate of occupancy Maintenance of “green building features”

10. October 8, 2008 Market Impacts Lessee preference for LEED buildings Reduces LEED certification costs Sense of comfort that LL can meet prerequisites Additional points LL can contribute to LEED-CI

11. October 8, 2008 Trend to LEED EB and EBOM Number of LEED EB certified buildings: 4* Number of LEED EB or EBOM registered buildings: 50* * per 10/8/08 review of USGBC website

12. October 8, 2008 Landlord Strategies Familiarize yourself with LEED standards Develop construction standards and guidelines Develop rules and regulations to incentivize tenants Establish realistic goals and targets for the building and know your tenant mix Do a Gap Analysis for LEED-CI First Steps

13. October 8, 2008 LEED-CI and LEED-EB The proactive tenant’s request for LEED-CI Basic understanding of LEED-CI 6 Prerequisites 1. Fundamental Commissioning 2. Minimum Energy Performance 3. CFC Reduction in HVAC&R 4. Minimum Indoor Air Quality Performance 5. Storage & Collection Recyclables 6. Environmental Tobacco Smoke Control

14. October 8, 2008 Landlord Contribution 12 Possible Points you can give your Tenant 3SS Cr1LEED building or other ½ pt options 1 SS Cr3.2Alternative Transportation (bicycles) 1SS Cr3.3Alternative Transportation (Parking) 2WE Cr1.1Water reduction 20%/30% 2EA Cr.3Energy Use and Measurement (submetering) 1EA Cr.4Green Power 1EQ Cr.5Indoor Chemical & Pollutant Control 1 MR Cr1.1Long Term Commitment

15. October 8, 2008 LEED CI Buildouts Integrated Team More Sophisticated Approach

16. October 8, 2008 Importance of a Qualified LEED Team LEED CI Construction Implications

17. October 8, 2008 CI Checklist Review

18. October 8, 2008 CI Checklist Review

19. October 8, 2008 CI Checklist Review

20. October 8, 2008 CI Checklist Review

21. October 8, 2008 CI Checklist Review

22. October 8, 2008 CI Checklist Review

23. October 8, 2008 CI Checklist Review

24. October 8, 2008 CI Checklist Review

25. October 8, 2008 CI Checklist Review

26. October 8, 2008 CI Checklist Review

27. October 8, 2008 LEED CI Construction Implications Cost Impacts

28. October 8, 2008 LEED CI Construction Implications Cost Impacts Average costs for non-LEED buildings:  LEED Certified:.66%  LEED Silver: 1.9%  LEED Gold:2.2%  LEED Platinum:6.8% Without integrated approach:10-30% Documentation / Commissioning: 2-3%

29. October 8, 2008 Project Study: SmithGroup Architects LEED CI Construction Implications

30. October 8, 2008 Project Study: Bently Reserve LEED CI Construction Implications

31. October 8, 2008 Building Ordinance

32. October 8, 2008 Lease Issues Lease Update/Green Lease Submetering and CAM Impacts Pass through of LEED certification and maintenance expenses Covenant to comply Sustainable building operations Disclaimer of Warranty

33. October 8, 2008 Lease Issues, cont’d Construction Standards for tenant improvements  Use of environmentally “good” products  Demolition standards  Indoor air quality  Minimum standards for plumbing, HVAC, lighting  Reuse of materials and furnishings

34. October 8, 2008 Take Aways Phased In Command and Control Ordinance Cautious implementation Tenant movement to green buildings Trend to LEED EBOM Integrated project team Leasing issues