BOMA BC – Market Insights

Accelerating success.

Whole Building Retrofits

Presented By: Jim MacKenzie

Colliers Global Coverage

United States125 offices3,800 employees260M SF managed24,000 sale/lease transactions

Canada36 offices1,400 employees47M SF managed4,200 sale/lease transactions

Asia32 offices2,000 employees374M SF managed4,500 sale/lease transactions

Europe/The Middle East/Africa 117 offices2,600 employees156M SF managed9,300 sale/lease transactions

What’s Driving Whole Building Retrofits

> Building inventory in Lower Mainland approaching 25 – 40 years

> Older buildings relied on central plant design• More robust, less efficient equipment exceeding anticipated life• Resulted in deferred capital upgrades• Upgrades may be co-dependent and impact other systems

> Results: Many original systems still in operation with minimal upgrades

> Opportunity for full building review as equipment begins to fail

What Are Clients Most Interested In?

> Reducing vacancy

> Reducing operating costs

> Positioning property as sustainable

> Don’t want to spend exorbitant consulting fees

> Want their Property Manager to be advocates for sustainability

> Don’t want to be subservient to technology

> Want to manage and reduce capital

Understanding Clients Objectives

> Need to understand owners investment objectives and horizon

> Building retrofit and paybacks need to be planned with investment horizon in mind - Future redevelopment

- 1 to 5 years – short term (integrate sustainability into operations)- 5 to 10 years – medium (individual upgrades)- 11+ years - long term (whole building retrofits)

> Don’t propose lengthy payback or high capital if investment horizon is short term

> Balance upgrades within existing capital budget and amortization schedules

Colliers Sustainability Services

> Green Building Assessment - a pre-feasibility screening tool

> Comprehensive survey of all aspects of sustainability - Energy- Water- Indoor air quality- Tenant satisfaction- Operating policies and practices

Provides a high level assessment of how a property aligns with industry standards

- BOMA BESt- LEED

> Generates a summary of initiatives that can be implemented in accordance with owners objectives

> Content used to develop asset management plan and strategy

OpportunitiesBlend projects with high and low payback.

HVAC – Enthalpy control

Measurement and Verification> Monitor and share utility consumption with building operators

Tenant Improvement Criteria> Design electrical distribution to accommodate sub metering> Segregate domestic hot water loads for tenants> Data centre cooling loop> Recapitalize systems during tenant improvements

Lighting> Do test areas to establish similar levels prior to retrofit> Adjust levels using ballast factors> Anticipate power factor correction> Reduction in heat load> PCB’s

Tenant Engagement> Blinds, lights, office equipment, etc.

ChallengesCommissioning> Operating deficiencies identified but not resolved during construction

Cradle to Grave > technology becoming obsolete before reaching end of amortization period

Tenant Training> Tenants tampering with improvements (lighting, air balancing, HVAC settings)

Variable Frequency Drives> Induced magnetic bearing failure

Low flush toilet & waterless urinals > Source of tenant frustration > Horizontal distance from risers> Increased maintenance & odors

Green Landscaping> No pesticide and herbicide alternatives resulting in higher maintenance costs

Tenant Leases> Leases which exempt the recovery of capital, where tenants benefit from cost savings

Case Study 1 - Building Recomissioning

Property Overview> 105,000 SF> Downtown Vancouver office space> Managed by Colliers for 12 years

Challenge> Major tenant had expanded their premises – new space significantly increased the

density of occupants > Comfort and energy costs immediately increased

Solution> Initiated a review of energy use in the property > Recognized that the programming of the Direct Digital Controls system no longer

matched the change in occupancy and use of building> Recomissioned the Direct Digital Controls system and verified operation and split range

of valves

Results> Improved comfort throughout the building> Energy consumption for heating reduced by 26% resulting in 2 month payback

Case Study 2 – Energy Analysis

Property Overview> Client portfolio of 10 properties> Located in Toronto downtown core

Challenge> Higher than market energy intensity

Services> Utilized energy management database to measure, report and target

Results> Identified opportunities to reduce energy spend by approximately $1,000,000

across portfolio, which included, optimal start and stop in relation to occupancy, temperature reset, and energy retrofits.

Case Study 3 – Whole Building Retrofit

Property Overview – The Good Earth Building> 112,127 SF> Downtown Vancouver tier B office space> Whole building retrofit - 2006

Challenges> Existing building systems reaching end of useful life> Higher than average energy costs> Limited HVAC control

Solution> Energy study> Whole building retrofit

Case Study 3 – Whole Building Retrofit

ORIGINAL SYSTEMSBoilers> Natural Draft> Low efficiency> Heat exchanger failure> Primary loop with no hot water reset

Chiller> R-11 – not cost effective to convert> Approximately 30% oversized > Insufficient part load capacity> No redundancy> False loaded through makeup air heating coil

Cooling Tower> End of life> Low/high speed fan operation> Piping design issue

Case Study 3 – Whole Building Retrofit

ORIGINAL SYSTEMSLighting> T-12 – magnetic ballasts> Some ballasts with PCB’s> No lighting control system

Controls> Pneumatic> DDC restricted to time clock function> No chilled water control valves on floor fans> Only means of temperature control to reset chiller set point

Ventilation> No free cooling capability> VAV boxes had no minimum ventilation levels set> Duct static damper control

Case Study 3 – Whole Building Retrofit

NEW SYSTEMSBoilers> High efficiency – condensing boilers> Primary secondary loop with hot water reset> Redundancy

Chillers> Modular chillers with redundancy > Capacity matched to part and full load > Chilled water reset

Cooling Tower> New cooling tower with variable frequency drive> Plate exchanger installed for free cooling

Case Study 3 – Whole Building Retrofit

NEW SYSTEMSControls> Lighting controls – floor by floor> DDC Systems for primary systems> Chilled water control to air handling units> Variable speed drives and high efficiency motor for air handling units> Variable speed pumping> Reset and calibrated VAV boxes

Lighting> T-8 lamps & electronic ballasts

Results> Simple payback in 12.9 years> 32% reduction in energy costs> 618 tons of CO2 equivalent per year reduction