BOMA: Achieving High Performance Through Innovation

1. A Business Case for Multi-Tenanted Office BuildingsCreating a Win forOwners, Managers and Tenants Richard W. Greninger, CPM Vice Chair, BOMA International Managing Partner, Operations Carr Properties Washington, DC BOMA: Achieving High Performance Through Innovation

2. 210,655 sq. ft. • 2 level garage with 203 spaces • Built in 1979 • Owners: • 1575 Eye St LP • American Society of Association Executives • AETNA • Carr Properties, Managing Partner 1575 Eye Street, NWWashington, DC 20005 BOMA: Achieving High Performance Through Innovation

3. Occupancy Profile / Major Tenancy • American Society of Association Executives (ASAE) • 40,516 sf (20%) • Veteran’s Affairs (VA) • 63,798 sf (30%) • Federal Aviation Administration (FAA) • 54,942 sf (26%) • 76% of the building occupied by three tenants   • 56% expiring leases in 2010 and 2011 (VA and FAA) BOMA: Achieving High Performance Through Innovation

4. Energy Efficiency Retrofit Profile • Replaced two chillers totaling 550 tons with two high efficiency chillers & replaced two cooling towers with new high efficiency towers, reduced from four fans and four motors to two fans controlled by a VFD • Replaced domestic water boost pumps with new high efficiency booster pump system with VFD’s • Installed soft start on central plant supply and return fans to control peak demand • Replaced 10-ton elevator lobby unit with high efficiency unit BOMA: Achieving High Performance Through Innovation

5. Energy Efficiency Retrofit Profile • Complete building lighting retrofit from F-40’s to T-8 lights, also installed sensors in all public restrooms and replaced light switches with motion control during new tenant build outs • Demand Management • Installed energy modeling/management system and upgraded building-wide EMS system to “state of the art,” and incorporated Constellation Demand Response Program. • Supply Management • Renegotiated electric supply contract with Constellation Energy, reducing cost 25%. BOMA: Achieving High Performance Through Innovation

6. BOMA: Achieving High Performance Through Innovation

7. High Performance ROI • Energy Efficiency Retrofit Cost $ 963,000 • Annual Reduction in Electric: • Consumption 1,056,246 KWH (21.5%) • Cost Savings (2012) $ 220,000 • Annual R&M Savings $ 20,000 • Annual Rental Revenue (VA & FAA) $ 5,471,881 • Total Savings $ 5,711,881 • Payback Ratio (Total) $ 963,000 / 5,711,881 = 2.1 mth • Payback Ratio (Energy Only) $ 963,000 / 240,000 = 4 years BOMA: Achieving High Performance Through Innovation

8. Benefits • Owners • Retained 56% of tenancy preserving $5.5 million in gross income • Long-term viability of investment • GSA and Class A tenancy evaporation • Instantaneous payback of investment and value enhancement • Projected $15,000,000 value gain (Revenue and Cap-rate improvement) • Achievement of sustainability goals BOMA: Achieving High Performance Through Innovation

9. Benefits • Managers • Operational performance efficiency • Achievement of sustainability goals. Energy Star rating of 85 • Income/fee enhancement • Job preservation (20 positions) • Tenants • Consistency of workplace environment • Achievement of sustainability goals • Greater employee productivity • Reduction in gross rent payments BOMA: Achieving High Performance Through Innovation