Presented By: Craig Sheehy President/CEO

1. Understanding sustainable building operations Presented By: Craig Sheehy President/CEO

2. What Is The Purpose? • Environmental Benefits • Reduce impact on natural resources • Community Benefits • Reduce strain on local infrastructure • Health Benefits • Enhance tenant comfort and health • Economic Benefits • Improve bottom line • Marketing tool • Personal Benefits • Be a leader in your industry and support environmental efforts

3. Do Green Buildings Make Dollars & Sense? CBRE, USD & McGraw-Hill Survey • 147 Building Nationwide • 721 Tenants • 58,638,539 Rentable SF • Average Energy Star Score 89

4. Do Green Buildings Make Dollars & Sense? CBRE, USD & McGraw-Hill Survey 2011 Findings – • Tenants in Green Buildings Claim Higher Productivity & Less Sick Days • Reinforced Increased Demand for and Value of Green and in Particular for LEED Certified Buildings • Energy Star Average Score Continues Improving • Occupancy & Rental Rates Better than Market • Downturn is Impacting Green Commitment

5. Do Green Buildings Make Dollars & Sense? CBRE, USD & McGraw-Hill Survey 2011 Findings – Occupancy Big Reveal: Market Avg. 83.15% • Green Building Occupancy is Generally Better than Market & Better Over Time • Survey Set – 2.59% Better on Average • LEED Buildings – 2.41% Better on Average

6. Do Green Buildings Make Dollars & Sense? CBRE, USD & McGraw-Hill Survey 2011 Findings – Rental Rates Big Reveal: Market Avg. $27.62 • Green Building Rental Rates is Generally Better than Market & Better Over Time • Survey Set – $0.43 PSF Better on Average • LEED Buildings – $2.54 PSF Better on Average

7. 2012 – The Compelling Economics of Greening Commercial Real Estate Green Buildings Become The Tie Breaker • Generally perform 20%-30% better • Many trophy tenants – Corporate, State & Federal are requiring LEED • When comparing Building A (LEED Certified) to Building B (Brown Building), if buildings are similar, the Sustainable Building should win in 8 out of every 10 deals • Economic Benefits – what if the studies are true?

8. Sustainability Made Easy Focus on Water, Energy, Waste & Improving Indoor Air Quality Start With The Low Hanging Fruit • Water – Though water is still relatively inexpensive for now there still are easy ways to save with a payback. Assume a cost of $5 - $8 per 1,000 gallons. • Energy – The Holy Grail of Sustainability – The cheapest form of energy is one not used. • Waste – Surprised at the low percentage of recycling rates across the Country. • Indoor Air Quality – Healthy buildings increase productivity

9. Water Savings - Restrooms SAMPLE BUILDING – 250,000 S.F. – 1,000 OCCUPANTS – 30 RESTROOMS – 3.5 GPF W/C - 1.0 GPF URINAL - 2.2 GPM SINKS • Start with Aerators on Faucets - $2 - $5 each – Change out to .5 gpm aerators – Saves 331,000 gallons annually • Urinals – Test .5 gpf flush valves – will work in most urinals without having to replace entire unit. Assume $100 each. Saves 195,000 gallons annually. • Water Closets – Usually a Capital Expense – Recommend changing entire unit and not just flush valve to 1.28 gpf unit. New Technology helps these low flush units perform. Saves 1,154,400 gallons annually. • Save up to $13,000 annually

10. Water Savings - Landscape SAMPLE BUILDING – 250,000 S.F. – 1,000 OCCUPANTS – SUBURBAN BUILDING WITH TURF • Have Landscape Contractor Provide Proposal on What It takes to Save 50% in Water and Provide Payback. • Replace Sprinkler Heads – Use high efficiency heads - $5 each and will save 30% in water use. • Use drip lines when applicable and rain sensors – Rain Sensors - $25 each. • Satellite Irrigation Controls – Capital Expense – System controlled by Weather Satellite. Assume $10,000. Saves 40% - 50% on irrigated water.

11. Water Savings – Cooling Tower Building Must Have Cooling Tower • Cooling Tower is the Largest Use of Water in a building. • Install Controls on Cooling Tower - $1,000 • Meter the Blow Down/Evaporation – You pay sewer charges on all water that comes in through your domestic line. Show amount of water that did not go into sewer. Sewer Charge Rebate payback is weeks or months. • Can we reduce water cycles per day in cooling tower without effecting performance.

12. Energy Savings Benchmarking in Portfolio Manager for Energy Star • Portfolio Manager helps you track and assess energy and water consumption within individual buildings as well as across your entire building portfolio • Enter energy consumption and cost data into your Portfolio Manager account to benchmark building energy performance, assess energy management goals over time, and identify strategic opportunities for savings and recognition opportunities • For many facilities, you can rate their energy performance on a scale of 1–100 relative to similar buildings nationwide. A score of 50 would be an average building. Energy Star normalizes for weather, occupancy and building operation to compare with other buildings.

13. Energy Savings Energy Audit • ASHRAE Level II or Re-Commissioning – Huge opportunity to find low cost/no cost energy savings. Paybacks are normally less than 2 years but I find that they are less than 1 year. • Savings are from 5% to 20% on energy. • Audit develops an understanding of the system operation, identifies measure to optimize performance and develop a plan to optimize performance. • Buildings I have performed Energy Audit for LEED Points are averaging 108% ROI on all LEED costs with a 1 year Payback.

14. Energy Savings – Low Cost/No Cost YOU DON’T HAVE TO HIT A HOMERUN – SINGLES ADD UP TO HUGE ENERGY SAVINGS • Change 32 watt T8 bulbs to 28 watt – Eye can’t perceive a change in light. 12.5% savings on lighting. Also try 25 watt for additional savings. • Delamp – If you have 3 lamp fixtures – remove center lamp. 33% savings. • Stairwells – Burning 24/7 – Motion Sensors – Check with Local Authority First – Delamp – Reduce the amount of bulbs. • Building Start Up – Perform Trials – Can we start up system 30 – 45 minutes later and still bring up to speed before tenants arrive.

15. Energy Savings – Low Cost/No Cost YOU DON’T HAVE TO HIT A HOMERUN – SINGLES ADD UP TO HUGE ENERGY SAVINGS • Building Shut Down – Can we shut down system 30 minutes to an hour early keeping fans running and let building load carry you through the rest of the day. • Thermostats – As long as fans are running people can’t decipher a couple degrees in temperature. • Visit Building After Hours – Twice a year property/facility managers should show up at building after janitorial has gone home and just look and listen to see what is on and what is running. • Install Occupancy Sensors – Most old tenant improvements don’t have. Look at passing through as operating expense savings.

16. Waste What Are We Throwing Into Landfill • Perform Waste Audit (Dumpster Diving) – Suggest hiring company to perform. Assume $2,000. Great tool that shows what is being sent to landfill that could have been recycled. • Recycling Program - Put together program and communicate to tenants. Contest between floors? • Recycling Cans – Make them convenient throughout tenant space. If you have paper recycling cans, no need to place liner in it. • Recycling Rebates – Are you getting paid from waste hauler for recycling. They are! • Compost Programs – Normally need refrigerated bin – maybe worms? Is green waste being recycled?

17. Indoor Air Quality USE TO BE IT HAD TO SMELL CLEAN TO BE CLEAN – NOW IF THEY SMELL IT IT’S KILLING THEM • Cleaning Chemicals - Make sure Janitorial company is using Green Seal GS-37 cleaning chemicals on most products. • Perform monthly janitorial walk throughs – Look for tenants bringing chemicals from home or other issues that could cause problems. • Pest Control – What poison is pest company putting down on your property monthly. You would be surprised. Check with them about healthier alternatives – they do work. • Walk Off Mats – 250,000 s.f. Building – mats will collect 500 lbs. of dirt per year.

18. Financial Benefits Of Productivity Increase Carnegie Mellon Studies have shown productivity increases ranging from 0.4% - 18% Average Cost for a U.S. Office Building Salaries $318.00 p.s.f. Technology 50.00 Mortgage/Lease 32.00 Energy 2.35 Total $402.35 Findings 1% increase = $4.02 p.s.f. 5% increase = $20.12 p.s.f. 1% inc. in 100,000 s.f. Bldg. = $400,000 p/year 5% inc. in 100,000 s.f. Bldg. = $2,000,000 p/year

19. 20 Week LEED EB O&M Submittal Program Charette: 1 month Performance Period: months 2- 4 Submit to USGBC: month 5 Property Management will Work 1 Hour a Week on LEED Engineering will Work 1 Hour a Week on LEED USGBC Review: 25 Days Consultant Answers: 25 Days Final Certification Level: 15 Days

20. The Ease of LEEDLEED EB Operations & Maintenance Version 3 Average Class A High Rise • 6 Points. - Sustainable Sites • 2 Pts. – Policies & Procedure on Exterior & Hardscape and Pest & Erosion Control • 3 Pts. – Alternative Transportation • 1 Pt. – Parking Garage • 4 Points. – Water Efficiency • 2 Pts. – Water Meters • 1 Pt. – 10% Water Savings • 1 Pt. – Cooling Tower Chemical

21. The Ease of LEEDLEED EB Operations & Maintenance Version 3 Average Class A High Rise • 11 Pts. – Energy & Atmosphere • 10 Pts.– Energy Star Score - 81 • 1 Pt. – Emissions Reporting • 4 Pts. – Re-Commissioning • ASHRAE Level II Audit - $15,000 • Implement Measures with 1 Yr. Payback

22. The Ease of LEEDLEED EB Operations & Maintenance Version 3 Average Class A High Rise • 4 Pts. – Materials & Resources • 1 Pt. – Low Mercury Bulbs • 1 Pt. – Waste Stream Audit • 1 Pt. – Recycling at 50% • 1 Pt. – E-Waste Recycling Day • 2 Low Cost Pts. – Facility Alteration • Need 2 Trades Using Low VOC materials and recycle demo waste

23. The Ease of LEEDLEED EB Operations & Maintenance Version 3 Average Class A High Rise • 8 Pts. – Indoor Environmental • I-Beam Survey – IAQ Program • Lighting Controls – 50% of cubicles have task lighting • Green Cleaning Program • Custodial Effectiveness Survey • Purchase Green Chemicals • Sustainable Cleaning Equipment • Roll Off Mats • Pest Management Plan

24. The Ease of LEEDLEED EB Operations & Maintenance Version 3 Average Class A High Rise • 5 Pts. – Innovations • 1 Pt. – Green Education • 1 Pt. – Mercury Reduction • 1 Pt. – LEED AP • 1 Pt. – Provide 2 years of Op. Expenses & also during Performance Period. • 1 Pt. – Regional Credit (usually one easy point here)

25. The Ease of LEEDLEED EB Operations & Maintenance Version 3 Total Pts. from Previous Slides 44 Total Points = Certified • Additional Costs: • Waste Audit - $2,000 • Outside Air Measurement - $3,000 - $7,000 • Restroom Retrofits • Aerators, flush valves, full retrofit • ASHRAE Level II Audit • Assume $15,000 • Consultant/USGBC Fees • Assume $47,500 +-

26. Envision Realty Services’ Economics of LEED EB Economic Summary(Detailed sheet on next slide) • Ave. Sq. Ft. - 333,800 • Ave. certification cost - $76,675 • Includes Registration, Certification, Consultation & needed retrofits • Ave. cost per Sq. Ft. - $0.22 • Ave. savings per Bldg. - $82,956 • Includes operational and energy savings • Ave. payback - < 1 year • Ave. ROI – 108%

28. Greening Your Building Toward The Bottom Line Examples of Actual Savings Cal/EPA Sacramento 2005Downtown EER Waste Removal $0.00 $0.06 Cleaning Supplies $0.05 $0.14 Electricity $0.99 $2.05 Misc. Jan/Eng/Admin $0.10 $0.31 Water $0.02 $0.06 Landscape $0.05$0.09 Partial Total $1.21 $2.71 Difference $1.50 p.s.f. annually Annual Savings $1,425,000 7% Cap Rate = $20,035,142 of additional value

29. Proposed Changes for LEED 2012 Now V.4 Balloted June 1 – 30, 2012 – Changed to June 2013 3 Years to stay in 2009 Version Sustainable Sites • No major changes except they pulled Alternative Transportation into its own category. Water Efficiency • V.3 – 1993 buildings and older 160% of baseline – V.4 – 1995 or older 150% of baseline • Lose a point for water metering plus an easy innovation credit. Must now have 3 sources metered. • Cooling Tower credit has changed – V.3 just needed a plan – V.4 chemical company will need to do an analysis.

30. Proposed Changes for LEED V.4 Balloted June 1 – 30, 2013 Energy and Atmosphere • Prerequisite is 75 in Energy Star – V.3 was 69 • Don’t receive a point until 76 – V.3 a 76 was worth 5 points – 2012 – 20 points for 95 in ES as opposed to 18 in V.3 • Emission Reduction no cost point has been taken away. • Demand Response is new and worth 3 points Materials and Resources • Waste Audit is now a prerequisite instead of a point. • New Prerequisite for Facility Alterations • E Waste Recycling no cost point has been taken away

31. Proposed Changes for LEED V.4 Balloted June 1 – 30, 2013 Indoor Environmental Quality • Not a ton of changes in this section • Interior lighting credit has changed – No longer receive a point for cubicles having a task light. V.4 – Must have 3 different light levels throughout. Certified 40 – 49, Silver 50 – 59, Gold 60 – 79, Platinum 80 up Comparison with V.3 from previous slides Average Class A High Rise 33 Points for V.4 44 Points in V.3