2013 BOMA Bay Area Sustainability Report

Green is Gold

Green Pros Wanted

LEEP Saves Energy

City Resources

Sustainably Built and Operated Buildings are More Profitable

Green Buildings Require Many Participants

Greener-Lit Parking Garages and Lots Save Energy

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SF Government Helps Buildings Become Greener – At No Cost

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A special thanks to the sponsors of the BOMA Bay Area EARTH Awards.

Lead Sponsor The Sustainability Report is edited and designed by Eason Communications LLC and published by the Building Owners and Managers Association (BOMA) San Francisco and BOMA Oakland/East Bay for the BOMA Bay Area EARTH Awards program.

To learn more about BOMA’s sustainability efforts, please visit: www.bomasf.org, www.bomaoeb.org and www.boma.org.

Copyright © 2013 by the Building Owners and Managers Association San Francisco.

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Luncheon Sponsors

Awards Sponsor

Green is Gold Sustainably built and operated buildings are more profitable and have greater value Evidence is abundant and mounting that green buildings are more profitable to operate—for many reasons.

They use less energy and water, command a rent premium, are more marketable, promote lease renewals, require less maintenance, boost building value and sale price and generate better goodwill within the community and among public officials.

The Building Owners and Managers Associations of San Francisco and Oakland/East Bay can take pride in being major forces in making Bay Area commercial office properties arguably the greenest in the nation, measured by many standards. San Francisco has the largest urban concentration of ENERGY STAR-certified buildings in the country on a square-foot basis and is No. 6 in the nation in the number of ENERGY STAR-certified buildings, despite being smaller than many other major cities.

The area’s reputation for being a highly sustainable community acts as a magnet for new business, especially those staffed by younger, well-educated employees who value a clean environment.

BOMA’s unique EARTH Awards and preceding efforts have encouraged sustainability in San Francisco’s commercial real estate community by spreading knowledge of how to operate greener buildings in numerous ways, from garages to rooftops. Buildings that have competed for green distinctions have elevated their value to all stakeholders.

a green, sustainable building. As a result of the steadily increasing market domination of LEED and ENERGY STAR in the Bay Area, being green adds a certain cachet to an asset for a prospective tenant. Even if one ignores the data showing higher rent, effective rent, and building sale prices for sustainable real estate, why put oneself at a competitive disadvantage by not striving to be green?”

Green buildings are increasingly important to tenants.

“The typical tech firm employee spends far more time at the office location: eating, exercising, working and in some cases, sleeping there, along with recreational activities that include jam rooms, gaming, yoga, dancing and more. The energy level and time commitment to ‘the business’ is great, so providing them a healthy environment is

Green Buildings Are More Profitable $ Use Less Energy and Water $ Generate Higher Rents $ Attract More Tenants $ Increase Building Value $ Enhance Tenant Satisfaction

Green buildings: the bottom line A recent CBRE national survey of 156 buildings totaling 52 million square feet and 588 tenants concluded that green buildings have higher rental rates, better occupancy, increased asset value and decreased operating expenses.

Tenants in sustainable buildings reported that green office space aids in employee recruitment and productivity, impresses their visitors and boosts their public image.

“Take a stroll through the financial district in downtown San Francisco and witness the ubiquity of LEED and ENERGY STAR plaques on the largest and most attractive commercial buildings,” says Zachary Brown, Sustainability Manager, CBRE’s Asset Services Group.

“It should be no surprise that the youth-oriented booming tech companies flooding high-rises place a concrete premium on the often intangible value of leasing space in

vital,” says David Hayes, CEO of Skyline Construction, whose company has built many sustainable offices in the Bay Area.

In the many knowledge-based industries in Northern California, employee well-being translates directly into profitability. “The value of investing in good energy management is clear, it increases net operating income and building value and at the same time improves tenant comfort and marketability. As awareness to building energy performance continues to grow, it's critical for building managers to actively engage in ongoing improvement to remain competitive,” says Justin Tiedemann, CEO of EcoCosm.

(Continued on page 14)

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2013 BOMA EARTH Award Winners Large Buildings • Over 500,000 SF 1st Place: One Front Street, San Francisco • Jones Lang LaSalle

2nd Place: Hills Plaza, San Francisco Jones Lang LaSalle

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3rd Place: One Maritime Plaza San Francisco • CBRE, Inc.

2013 BOMA EARTH Award Winners Medium Buildings • 300,0000 to 500,000 SF 1st Place: Russ Building, San Francisco • Shorenstein Realty Services

2nd Place: 650 California Street San Francisco • Tishman Speyer

3rd Place: 2100 Powell, Oakland Hines Interests Ltd. Partnership Sustainability Report

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2013 BOMA EARTH Award Winners Small Buildings • Under 300,000 SF 1st Place: 150 California Street, San Francisco • CBRE, Inc.

2nd Place: 501 Second Street San Francisco • The Swig Company

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3rd Place: 633 Folsom Street San Francisco • The Swig Company

2013 BOMA EARTH Award Winners Innovation Awards Innovation of the Year: Landscaping for the Community 101 California, San Francisco Hines Interests L.P.

Recognition of Innovation Cleaning with Orbio (101 California, San Francisco Hines Interests L.P.) A Garden for The Tenants (1001 West Cutting Blvd., Richmond Wareham Development) Tenant Loop Condenser Water Retrofit (One Maritime Plaza, San Francisco CBRE, Inc.) Temperature Sensors for Steam Traps (The Mills Building, San Francisco The Swig Company)

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Green Buildings Require Many Participants It takes many types of professionals and service and product providers to make a building sustainable: architects, contractors, energy and waste consultants, to name a few.

“Building efficiency practices are constantly evolving and ever-improving. As our industry continues to get smarter and more innovative, our consultants are our eyes and ears to educate us on what emerging trends and new best practices may be suited for implementation at other properties,” says Blake Peterson, Senior Property Manager at Langley Investment Properties.

Environmental Building Strategies is an example of the type of firm that works with property managers and engineers to green a building. “To benefit from their sustainability goals, building owners and project teams must analyze life cycle costs, materials, construction techniques and operating procedures in order to have a deep understanding of the economics and sustainable opportunities that exist in the renovation,

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Hathaway Dinwiddie’s tenant improvement project for Morrison & Foerster LLP received LEED Gold Certification, featuring water use reduction, energy savings and recycled and regionally sourced materials.

maintenance and operation of existing buildings. That analysis will optimize the value of their building — hence EBS fulfills these ambitions through comprehensive financial and environmental analysis,” says company Principal Matt Macko.

Building owners and managers increasingly seek more sustainable operating environments—and so do their tenants. “The Bay Area is at the forefront of the country when it comes to support for green building and most tenants are increasingly interested in incorporating green building practices and design elements into their projects.

As with other developments, such as sophisticated technology, cost is always a factor. However the industry is advancing at a pace that allows for many sustainable features, that would have resulted in a cost impact only a few years ago, to be included at no additional cost,” says Tom Williamson, Special Project Manager at Hathaway Dinwiddie.

Saving energy is always at or near the top of everyone’s sustainability list. “Energy efficiency is a resource that can be extracted to improve environmental performance and reduce operating expenses in commercial and industrial buildings. We make it profitable for properties to become carbon neutral through turnkey, customized, and data-driven energy projects,” says Eric Brown, Director of Business Development at Carbon Lighthouse.

Greener–Lit Garages and Parking Lots Result in Extensive Energy Savings If the Building Owners and Managers Association and allied organizations achieve their goal of more efficient energy use in garages and parking lots, enough energy would be saved to power 4,500 homes annually. The recently launched Lighting Energy Efficiency in Parking (LEEP) Campaign encourages the use of high-efficiency lighting technology.

Participating building owners and managers agree to evaluate their portfolio to identify potential parking lots or parking structures that can apply high-efficiency lighting technology and to use high-efficiency lighting where feasible and cost-effective. Both retrofit and new construction projects are eligible to participate in the campaign. Existing sites that have been built or retrofitted with high-efficiency technology are also eligible to participate in the campaign, if they were built or retrofitted after January 2010.

LEEP’s goal is to have 100 million square feet of parking structure or lot space to use roughly one-third less energy than ASHRAE Standard 90.1-2010. Based on estimates, these energy savings equal more than 51 million

kilowatt-hours. “Tremendous progress has been made in recent years on the quality and cost-effectiveness of LED lighting and other technologies,” remarked BOMA International Chair Joseph W. Markling, managing director of Strategic Accounts at CBRE. “There has never been a better time to retrofit parking lots and structures as state-of-the-art lighting technologies can last two-to-five times longer than traditional outdoor lights. Additionally, these systems pay for themselves quickly by cutting energy costs by up to 70 percent and maintenance costs by up to 90 percent.”

The LEEP Campaign website, www.leepcampaign.org, gives interested organizations information on technical and financial assistance, as well as case studies, rebates and incentives. Organizations that join LEEP will be recognized on the campaign website for their participation. Projects with notable energy savings will receive awards from the LEEP campaign and will be profiled on the site. The deadline for submitting project information is November 30, 2013. Results and awards will be announced in February 2014.

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If less is more, Zero Waste is everything. â–˛

Congratulations to BOMA’s 2013 Bay Area Earth Award Winners recologysf.com/zero

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San Francisco City Government Helps Commercial Buildings Become Greener — At No Cost

By Delyn Kies, Waste Diversion Consultant to SF Environment

If you want to reinvigorate your recycling and composting program, free expert assistance is just a phone call away. The San Francisco Department of the Environment (SFE) offers free resources and

“We really needed to improve our buildings’ recycling diversion rate. We conducted our own tenant visits and started a tenant-by-tenant checklist of performance. But we still had a few tenants that were not cooperating.

We called in SFE to conduct customized training with photos of their contaminated recycling. They did a demonstration of what’s recyclable, what’s compostable and what’s landfill trash, and then what happens to the materials once they leave the building. It was like a light bulb going off for our tenants! They reported back that they got all their questions answered and now I’m armed with a customized presentation and all the website tools to keep it going,” Sonia Sharma, Hines Tenant Service Coordinator.

For information, visit: www.sfenvironment.org/zwbusiness

SF Environment conducting waste audit at 501 Second Street.

(Photo courtesy of The Swig Company.)

on-site assistance to set up and improve recycling and composting collection programs.

“We took advantage of SFE’s free waste audit. I watched and took notes while the crew sorted my building’s discards into recycling, composting and landfill. It was eye-opening how many recyclables and compostables were still in the landfill trash! We immediately scheduled an educational training for our tenants and showed them everyone’s performance. Believe me, the tenant at only 30% recycling diversion was embarrassed and motivated to improve,” says Assistant Property Manager Jenna Hattersley of The Swig Company.

While the Mandatory Recycling and Composting Ordinance requires owners and managers of commercial properties to provide information and training to tenants and janitors each year, sometimes a little professional help is needed. Check out the Commercial Recycling Toolkit at: www.sfenvironment.org/zwbusinesstoolkit.

To support implementation of your program, you can get help creating posters and stickers, sample letters to tenants and the template of a tenant training program.

But SFE’s help doesn’t stop there. It also provides free multi-lingual janitorial trainings, on-site trouble-shooting for retail tenants, and educational presentations for office tenants.

Or contact: Steven Chiv, Zero Waste Commercial Associate, SF Environment, 415-355-3745, steven.chiv@sfgov.org or Delyn Kies, Waste Diversion Consultant to SF Environment, 415-209-0321, delyn@kies-strategies.com.

“The Building Owners and Managers Association of San Francisco (BOMA SF) has shown tremendous environmental stewardship in helping make our City the cleanest and greenest in the country.

From early advocacy and support of indoor smoking bans, recycling and composting programs, energy reduction and benchmarking initiatives, and water conservation programs, BOMA San Francisco and its members have led the way to making San Francisco one of the cleanest and healthiest places to live and work.

I commend BOMA for continuing to encourage its members to redouble their commitment to energy conservation and sustainability through the EARTH Awards, promoting our City’s zero waste goals and implementing the best environmental policies and programs in commercial real estate.”

— San Francisco Mayor Ed Lee

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Is ENERGY STAR Working?

by Mark T. Jewell, Co-Founder, Efficiency Sales Professional Institute

The EPA issued the first ENERGY STAR label for buildings nearly 15 years ago. Today, there are more than 21,000 buildings sporting this designation, collectively saving more than $2.7 billion in annual utility bills and preventing greenhouse gas emissions equivalent to the annual electricity use of more than two million homes in 2012. San Francisco is currently ranked 6th on the list of U.S. cities with the most labeled buildings, at 291.

McAllister’s 2011 study Green Noise or Green Value?

Measuring the Effects of Environmental Certification on Office Values, have made the connection between ENERGY STAR labeled buildings and higher base rental rates per square foot, lower vacancy, and/or higher value per square foot.

Third, more and more jurisdictions around the country are relying on Portfolio Manager to provide the transparency real estate players need to make better business decisions. San Francisco now requires certain non-residential buildings to benchmark annually and makes their scores publicly available to facilitate market transparency. When California’s AB1103 legislation takes effect later this year, anyone selling, leasing or refinancing certain types of entire buildings will be required to disclose energy performance data to the counter-party in the real estate transaction.

In short, energy performance transparency works by providing a wide range of market players the information they need to make better decisions as they move to leverage enhanced efficiency to create genuine value in the buildings they own or occupy.

San Francisco is among the nation’s top green metropolitan areas, with 291 ENERGY STAR-certified commercial buildings.

ENERGY STAR benchmarking “works” from many perspectives. First, the Portfolio Manager tool that EPA uses to benchmark building performance not only gives managers valuable insight into which buildings are most in need of efficiency upgrades, but also motivates them to set improvement targets and track their progress on a normalized basis. ENERGY STAR recently analyzed building data from 2008 to 2011— some 35,000 buildings with complete benchmarking data — and found an overall decrease in energy consumption by 7%.

A recent report commissioned by the California Public Utilities Commission found that benchmarking was highly correlated with building energy improvements and management actions and led to increased customer participation in utility rebate and incentive programs.

Second, many recent studies have drawn the connection between a high score and improved competitiveness, profitability and value. The financial impacts of ENERGY STAR extend far beyond the utility bill. Several authoritative studies, including Franz Fuerst and Patrick

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Green is Gold (Continued from page 3)

RUSS BUILDING 235 Montgomery Street

LEED Gold Energy Star Rating of 96 Participant in the Better Buildings Challenge

For Leasing Information Contact: Jim Collins 415.352.7239

Tom McDonnell 415.772.7086

Detailing sustainability benefits “The largest controllable operating expense at most office buildings is utilities: electricity, gas, water, with lighting and HVAC accounting for the lion’s share of electricity,” says Gail Ringer, chair of BOMA San Francisco’s Energy and Environment Committee and vice president at Jones Lang LaSalle. “This,” she says, “is why there is so much emphasis on improving lighting and HVAC. A recent installation of low-wattage T8 lamps will bring a projected savings of $1,000 per year with a payback of three months after rebates.”

She adds, “A variable frequency drive (VFD) installed on a 30 horse power motor will save almost $4,000 in electricity costs and have a payback of four months after rebates. Not only is the owner getting a fantastic payback period for their capital investment, but the tenants and owner benefit long-term by the more efficient equipment and reduced consumption costs. Additionally, new lighting technologies last longer than their incumbents leading to both material and labor savings as well as energy savings.”

The Bay Area: A beacon of hope “BOMA members are proud of their contributions to making the Bay Area greener,” says BOMA San Francisco Executive Vice President Marc Intermaggio.

“We hope that our achievements will be an example for other communities, because we have very far to go before we become a green nation. Of the more than 5 million office buildings the Department of Energy says there are in the U.S., fewer than 22,000 have earned EPA ENERGY STARs. And the Department of Energy says energy costs rose 18% in the first decade of the 21st century.”

“EPA reports that ENERGY STAR buildings achieve significant savings in energy costs. When building owners recognize that investing in greater sustainability will produce a much better yield on their investment, the country will save energy and produce healthier workplaces,” concludes Stephen Shepard, executive director of BOMA Oakland/East Bay. Steven Ring, Meade Boutwell, Melody Thebeau, John Bozeman and others contributed insights and research for this article.

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