User Effective Applications
- 1. The value of your building tomorrow, may depend upon your commitment to sustainability today.
- 2. User Effective® Real Estate forFree! • 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’
- 3. 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
- 4. 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
- 5. 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
- 6. 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
- 7. 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)
- 8. Quantifying “Green” Economic Benefits The (4)-categories of benefits to Owner with relative 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
- 9. Enhanced Marketing & PR : $0.25/SF Annual Expense 5% Marketing / PR Enhancement $0.0125 / 0.09 Capitalization Rate $0.14 Benefit Offset to Initial Costs Reduced Operating Expenses : $1.80/SF Annual Utility Expense 10% Enhancement of Utility Efficiency $0.18 / 0.09 Capitalization Rate $2.00 Capitalized Benefit
- 10. Reduced Capital / Maintenance: $15/SF Average Turn Cost = $1.50/YR 5% Offset in Tenant Turn-Over $.075/YR / 0.09 Capitalization Rate $0.83 Benefit Offset to Initial Costs $0.25/SF Annual Maintenance Expense 10% Increase in Maintenance Burden $.025/YR / 0.09 Capitalization Rate $0.28 Increased Burden $0.55 Net Benefit to Offset Initial Costs
- 11. Reduced Obsolescence = Extended Long-Term Value: $0.50/SF Annual Capital Reserves 5% 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
- 12. Worker Productivity : $40,000/YR Salary 200-SF / Employee $200/SF Annual Salary Burden 0.25% Increase $0.50/SF/ per Yr. / 0.09 Cap Rate $5.56 Benefit Offset to Initial Costs Sales Revenue : $300/SF Annual Sales 0.25% Increase in Sales $0.75 / 0.09 Capitalization Rate $8.33 Benefit to Tenant (% Rent to Owner)
- 13. 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
- 14. What if Cap Rates areLower 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 rate 11.25% Increase in Value b/o cap rate Per Davis Langdon 2007 report Cost of Green Revisited, 1.9% increase in cost will cover premium to achieve LEED-Gold Can you risk not pursuing LEED certification?!