A Team Effort: Balancing Energy Efficiency And Reimagining .

A Team Effort: Balancing Energy Efficiencyand Reimagining the Office SpaceDecember 10, 2020

Agenda Welcome and Introductions Emerging Trends and Challenges Complementary Programs Driving Tenant Energy Efficiency Green Lease Leaders Urban Land Institute’s Tenant Energy Optimization Program ENERGY STAR Tenant Space Case Study Q&A

PanelistsHannah DebeliusScience, Technology, and Policy FellowBuilding Technologies OfficeU.S. Department of EnergyEmily PierceDirector,Greenprint Center for Building PerformanceUrban Land InstituteEmilyPierceCraigHaglundDirector,ENERGY STARProgram Manager,GreenprintCRECenterforMultifamilyBuilding PerformanceandUrban LandInstituteAgencyUS EnvironmentalProtection

Emerging Trends and ChallengesAllison Kirby

Why Building Emissions MatterU.S. Greenhouse Gas EmissionsBuildings cultureCommercial Building Electricity ReductionDuring April May Stay Home OrderLess than 10% occupancy

Energy Use in Leased SpaceTenants50%Landlords50%

Barriers to EfficiencyOffice closures7LightingPlug loads

Common Challenges in Reducing Building EmissionsText GoesHereText GoesHereBuildingAgeText GoesHere8TextOperatorGoesKnowledgeHereText GoesHereLeaseAgreementsOccupantTextGoesUseHereText GoesHereAccess toFinancingText GoesHere

Seven Most Common HurdlesTraditional lease negotiationsdon’t prioritize carbon savingsThere is a misperception thattenants don’t care about energyefficiencyIt is challenging to engageoccupants on energy efficiencyPre-lease signing often doesn’tadequately consider building andtenant operational needs9Increasing occupantworkspace density can hinderwhole-building carbonreductions strategiesTenant capital is typically notavailable mid-leaseMost tenants are unaware offinancing options

Growing Demand for Building-Related EmissionsReductionsMore cities are setting climategoals and passing buildingperformance policies10More investors are demandingsustainable options andtransparent reportingGreen buildings are proven to behealthier and save money

Complementary Programs Driving TenantEnergy EfficiencyAllison Kirby

AudienceBuilding TypesRequires Landlord-TenantCollaborationHelps meet corporate andmandates carbon reduction goalsOffers Recognition12ENERGY STARTenant SpaceGreen Lease LeadersULI Tenant EnergyOptimization ProgramTenants, Landlords, ServiceProvidersTenants, Landlords, ServiceProvidersTenantsOffice, Multifamily, Industrial,Retail, Data Centers,HealthcareOffice, MultifamilyOffice

Guidance Throughout the Leasing ProcessLeasing ProcessPRE-LEASEStepSelect a teamSelect an office spaceSet and communicate goalsDESIGN ANDCONSTRUCTIONMeter energy useIntegrate efficient equipment and lighting in the build outFormalize landlord-tenant energy management best practicesBenchmark energy usePOST-OCCUPANCYEstablish regular communications to report performancebetween landlord and tenantEarn RecognitionULI TEOPENERGY STARTenant SpaceGreen LeaseLeaders

Green Lease LeadersHannah Debelius

What is a Green Lease?Green leases, also known as “high-performance”or “energy-aligned” leases, improve the rental negotiationprocess by creating win-win agreements for buildingowners and tenants.Green leases equitably align the costs and benefits ofenergy and water efficiency investments for both parties.15

Why a Green Lease?Goals Eliminate “split incentive” problem Increase value and productivity of leasedspaceSavings16 Potential to reduce energy consumption inan office building by 11%–22% Can reduce utility bills by up to 0.51 persquare foot

Defining a Green LeaseGreen lease: A binding document defining how established goals will be metOutlines Priorities of Both PartiesEstablishes a Sustainability Point of ContactPrioritizes Environmental, Health and WellnessDefines How Building and Tenant Space will OperateEnables Ability to Report Progress17

Click to edit Master title style

Impact of the Green Lease Leaders ProgramEstablished as the industry standard2020 alumni represent 1 billion square feet offloorspaceGreen Lease Leaders manage nearly 3 billion squarefeet of commercial and government space in the U.S.and Canada19

Landlords – Silver and Gold RecognitionGold RecognitionSilver Recognition

Tenants – Gold Recognition

22

Start Transforming Traditional LeasesStep 1Step 2Step 3Complete the free Green LeaseLeaders Audit atgreenleaseleaders.com to seewhere you stand.Contact IMT for one-on-oneassistance.Visit greenleaseleaders.com andapply by March 31, 2021deadline

EMILY PIERCEDIRECTOR, ULI GREENPRINT CENTER FOR BUILDING PERFORMANCEA TEAM EFFORT: BALANCING ENERGY EFFICIENCY AND REIMAGINING THE OFFICE SPACE

ULI Greenprint - Reducing Carbon, Building ValueWorldwide alliance ofleading real estateowners and financialinstitutions committed toimproving theenvironmentalperformance of buildingsMember-driven initiativewith the goal to reducecarbon emissions 50%by 2030 and achieve netzero carbon operationsby 2050Includes 44 companiesrepresenting 10,000 properties totaling 220million square metersacross 32 countriesShare best practices and promote the businesscase for green buildings with the broader ULImembership25

ULI Greenprint Members26

Tenant Energy Optimization Program (TEOP) Over 50% of energy used in commercial office buildings isconsumed by tenants Free and open program targeting tenant space sustainability A 10-step process to embed energy efficiency decisions intotenant space design and construction Proven business case with returns-driven results Energy savings of 30 – 50% Payback period of 3 – 5 years Average IRR of 27%TenantEnergy.uli.org

The Returns of Energy Efficient Fit-Outs are Evident

TEOP Helps Prepare for Other Recognitions

TEOP and ENERGY STAR Tenant Space in Action

IntroducingENERGY STAR Tenant Space Recognition

Tenant Space Recognition: Origins Energy Efficiency Improvement Act of 2015 -- directed EPA to develop In 2018, over 50 tenant spaces participated in EPA’s Charter Tenant pilot Results from Charter Tenants informed and shaped new ENERGY STARTenant Space recognitionrecognition for energy efficient commercial tenant spacesFeedback from Charter Tenants:“Tenant spaces are notorious for not having incentives for energyimprovements. This is a great step in the right direction!”“Since our space was sub-metered at the [start] of the Charter Tenantprogram, lighting [energy use] has dropped dramatically.”

ENERGY STAR Tenant Spacerecognition: Empowers and recognizes commercial tenants whoadopt best practices for energy efficiency during fit-outand upgrade of their leased spaces. Distills the tenant-controlled actions that increase theefficiency of leased spaces and contribute to superiorenergy performance of the buildings that house thesespaces. Recognizes office spaces with lighting systems that areabout 25% more efficient than lighting found in typicaloffice spaces. Provides a positive opportunity for tenants and landlordsto collaborate around energy efficiency andsustainability.

How does ENERGY STAR Tenant Space recognition relate to wholebuilding Certification? ENERGY STAR certification is EPA’s flagship energy efficiency award fortop performing commercial buildings. Tenant Space recognition is a toolthat supports the goal of whole building efficiency and can help a buildingreach top performance. ENERGY STAR Certification requires 12 months of measured wholebuilding energy data. Tenant Space recognition does not requirereporting of measured energy data. Buildings that earn ENERGY STAR certification may include leased spacesthat have achieved ENERGY STAR Tenant Space recognition. Tenant Space designation may not be used “in a way that implies—orcould be reasonably interpreted to imply—that a whole building isENERGY STAR certified” (ENERGY STAR Brand Book).

Who is eligible to apply? To access the Tenant module within Portfolio Manager, a TenantSpace must:– Be either a general administrative office, financial office, or anon-diagnostic medical office (such as a doctor’s office thatdoes not include diagnostic equipment). It may include a datacenter. In Portfolio Manager, the EPA-Calculated Property Type (based on theproperty uses entered in your Details tab) must be Office or Financial Office.– Represent all of the tenant’s usable office square footage in thebuilding. Usable square footage is defined as all areas withinthe demising walls reserved for your exclusive use. In Portfolio Manager, the property must be designated “Part of a Building” inthe Basic Information section on your Details tab.– Be located in the United States.35

What Are Recognition Criteria? Estimate Energy Use Understanding energy use helps identify actions that make the biggestimpact. Meter You can’t manage what you don’t measure! Light Efficiently Lighting is an important energy user and one of the most cost-effectiveupgrades. Tenants will need to meet a lighting energy use target to qualify forrecognition. Use Efficient Equipment Upgrading equipment reduces the large energy draw from plug loads. Tenants must have a procurement policy in place that specifiespurchase of ENERGY STAR certified products whenever applicable (orsubstantially similar language) Share Data (upon request from landlord) Tenant data may enable whole building benchmarking, which supportsstrategic investment in energy performance and is often needed forcompliance with local laws and mandates.36

Overview of the Application Process1.Add a Tenant Space to Portfolio Manager2.Access the Tenant module and complete data requirements3.Generate application for Tenant Space recognition4.Have a Licensed Professional (LP) conduct a site visit, verifyingthe information in your application5.Complete the online application and submit the applicationelectronically to EPA6.Respond to questions from EPA, if necessary7.Receive notification of the application’s status37

Case Study

Sustainable Tenant Space Case Study: Rocky Mountain Institute

How does a Tenant Space achieve Net Zero Energy?Green lease clauses:-Energy budget-Recommissioning-Disclosure-Cost recoveryLandlord - Tenantcollaboration andcommunicationOnsite solar andinnovative buildingtechnologiesSubmetering anddata transparencyfor tenants

Boulder Commons was a step out of theordinary for Morgan Creek Ventures, however,after success meeting energy-use goals and apending official net-zero certification, this typeof design and construction has quickly becomeingrained in our practices.Andy Bush, Morgan CreekVentures

Q&A

Resources Full RMI TEOP Case Study Full RMI Green Lease Leader case study Green Lease Leaders Library TEOP 10 Steps TEOP 10 Steps for Multifamily Owners and Operators TEOP and EPA Energy Star Tenant Space Guide TEOP for Architects Unlocking Hidden Value in Class B/C Buildings ENERGY STAR Tenant Space

Thank you!Hannah Debelius,hannah.debelius@ee.doe.govEmily Pierce, emily.pierce@uli.orgCraig Haglund, gov44

and upgrade of their leased spaces. Distills the tenant-controlled actions that increase the efficiency of leased spaces and contribute to superior energy performance of the buildings that house these spaces. Recognizes office spaces with lighting systems that are about 25% more efficient than