The value of your building tomorrow, may depend upon your commitment to sustainability today.

User Effective® Real Estate for Free!

• 10’ x 10’ cubicle or 100SF

• $20 per foot or $2,000 annual rent

• Joe makes $50,000 annually

• Daylight and thermal comfort increase Joe’s productivity by 4%

• 4% x $50,000 = $2,000 savings

• UE features pay great dividends

10’

10’

Daylight Harvesting

Adaptable Workplace

Privacy

Under Floor Air

Interior Light Shelves

Task Lighting

Exterior Sunshades

Clerestory Windows

Tinted Low-E Windows

Raised Floors

Noise Control

User-Effective® Benefits

User Effective® Elements

• Thermal Control – 5.5% (20 studies)

• Privacy & Interaction – 10.9% (24)

• Ergonomics – 33.3% (70+)

• Land Use & Mobility – MU/TOD, et al

• Systems Flexibility – Plug & Play

• Interior Space Planning – >80% loss

Reprogrammable - UFAD, Moveable walls

Cost / Benefit Analysis

CBA: Mechanical Engineering Example

• List of Sustainable Technologies• Scope and Price Technologies•Organize into a Cost/Benefit model• Determine Categories offsetting Benefits• Analyze Cost/Benefit relationships

Get the best return on your investment

688 158 22 77 297 97

6300

0

1000

2000

3000

4000

5000

6000

7000

Lifecycle Costs

over 20 years

Building Alterations Moves Telephone Computers O&M Salaries

Calculating Economic Benefits

• Reduces operating costs• Decreases vacancy, improves retention• Marketing advantages & free PR• Optimizes life-cycle economic performance• Improves productivity• Reduces absenteeism and turnover• Providing a healthy workplace improves employee satisfaction• Reduces liability & compliance risk• May Increase building valuation (cap rate)

Quantifying “Green” Economic Benefits

The (4)-categories of benefits to Owner withrelative economic value shown as an Environmental

Credit (multiplier):

• Marketing & PR = $0.14/SF • Operating Expenses = $2.00/SF • Turn-Over / Maintenance = $0.55/SF• Obsolescence / L-T Value = $0.56/SF •Total Potential Economic Benefit = $3.25/SF

Enhanced Marketing & PR :

$0.25/SF Annual Expense5% Marketing / PR Enhancement$0.0125 / 0.09 Capitalization Rate$0.14 Benefit Offset to Initial Costs

Reduced Operating Expenses :

$1.80/SF Annual Utility Expense10% Enhancement of Utility Efficiency$0.18 / 0.09 Capitalization Rate$2.00 Capitalized Benefit

Reduced Capital / Maintenance:

$15/SF Average Turn Cost = $1.50/YR5% Offset in Tenant Turn-Over$.075/YR / 0.09 Capitalization Rate$0.83 Benefit Offset to Initial Costs

$0.25/SF Annual Maintenance Expense10% Increase in Maintenance Burden$.025/YR / 0.09 Capitalization Rate$0.28 Increased Burden

$0.55 Net Benefit to Offset Initial Costs

Reduced Obsolescence =Extended Long-Term Value:

$0.50/SF Annual Capital Reserves5% Reduction in Capital Requirements

(Better Systems / Increased Maint. Burd.)

5% Extended Asset Life (Offset Obsol.)$0.05 / 0.09 Capitalization Rate

$0.56 Benefit Offset to Initial Costs

Worker Productivity :

$40,000/YR Salary200-SF / Employee$200/SF Annual Salary Burden0.25% Increase$0.50/SF/ per Yr. / 0.09 Cap Rate$5.56 Benefit Offset to Initial Costs

Sales Revenue :

$300/SF Annual Sales0.25% Increase in Sales$0.75 / 0.09 Capitalization Rate$8.33 Benefit to Tenant(% Rent to Owner)

The (6)-categories of Benefits to the Owner and Tenant :

• Marketing & Public Relations = $0.14/SF

• Operating Expenses = $2.00/SF

• Turn-Over Burden / Maintenance = $0.55/SF

• Obsolescence / Long-Term Value = $0.56/SF

• Worker Productivity = $5.56/SF

• Sales Revenue = $8.33/SF

• Total Benefit: $17.14/SF

What if Cap Rates are Lower for LEED Certified Assets?!

50,000-SF building at $18.00 NNN Rent$900,000 Net Operating Income$10,000,000 Value @ 9% cap rate$11,250,000 Value @ 8% cap rate11.25% Increase in Value b/o cap rate

Per Davis Langdon 2007 report Cost ofGreen Revisited, 1.9% increase in cost willcover premium to achieve LEED-Gold

Can you risk not pursuing LEED certification?!