Green Building Finance & Investment Forum

Generic Pro Forma Modeling of a GreenGeneric Pro Forma Modeling of a Green Construction ProjectFebruary 20, 2008

Financial Higher EdPublic RetailCommercial Mission

Tom Paladino, President, , ,Paladino and Company, Inc.

Creating client value through a sustainable approach to asset management

Car Options

Chevy Malibu

Green Building Options

Options

Constant Program Option

Constant Budget Option

Constant Budget Approach: Molasky

Optimized Program & Budget Option

core goals

STEP 0: Green Building Hypothesis

The signature architecture incorporatesThe signature architecture incorporates intelligent facade design and high

f h i l t tperformance mechanical systems to create partner porch amenities with the lowest net zero impact and the highest building value. g g

Variables

intelligent facademechanical systemsmechanical systems

amenities

highest building value

Partner Porch

Conventional Design USP Benefits (to proforma)

8-6 FTF, acoustic tileparabolic lay-in lightingdrapes and mecho shades

9-2 FTF, composite ceilingdaylight + D/I + taskintelligent facade

Increased rent /sfReduce vacancyImproved productivitydrapes and mecho shades

single t’stat for 3 officesindeterminate air qualitybased on past comparables

intelligent facadepersonal environment c’trolsuperior indoor air quality future proofed

Improved productivityEmployee retention

1 Partner porch1. Partner porch

HVAC controls High ceiling

Partner Porch

controls

Indirect lighting Shading

device

High ceiling

Light reflecting

device

Low iron glass

reflecting surfaces

View

Floor to ceiling curtain

llwall wall

Green materialsmaterials

Conventional Design USP Benefits (to proforma)

new urbanism façadearchitectural composition is

sustainability based façadearchitectural

establishes leadership prestige & wow factormemorable elevation

imposition of creative will materials based on scarcity

composition is response to performance abundance based

response is evocativePre-lease acceleration

scarcity abundance based materials

2 signature building2. signature building

double skin facade

rain harvest membrane

shading device extensive

green roof

membrane

PV power shade

outdoor terrace

BIPVgreenwall

BIPV canopy

lobby coolingcooling featurestreet

trees

green materials

Conventional Design USP Benefits (to gproforma)

brute force designutility grid based

Integrated designrenewable based

insulate from energy cost spikes

systemsinflated capital costNNN out of tenant

t l

systems minimized capital costLower NNN costs to t t

climate change responder (risk)watershed steward (approval)control

In the comparable dogfight

tenanttangible, rare green product

(approval)capture incentivespermit acceleration

3 net zero impact3. net zero impact

3 net zero impact3. net zero impact

STEP 1: DEFINE STUDY

MEPA Unitary water cooled B CCW with central VAVC CCW w/ floor by floor

Underfloor ADOverhead AD

Low temp overhead ADC CCW w/ floor by floor

D Penthouse w/ fanwallE CCW w/ fan wall

overhead AD

Active chilled beam

Partner Porch

ASHRAE BaselineEast/west DSF with south overhangsEast/west thin with south overhangsEast/west thin with south overhangsEast /west thin façade with south DSF

Iconic Building

East /west thin façade w/south DSFEast /west articulated façade w south DSF

Central chilled water plant

Central VAV air handler unitshandler units

Overhead VAV InteriorInterior

Overhead VAV Perimeter

HVAC Scheme B

8 – 6 clear9 – 0 clear

Central chilled water plantwater plant

Central outside air w heat recoveryw heat recovery

Floor by floor air handler units

Overhead VAV interior

HVAC Scheme C2 Chilled Beam perimeter

3. amenity inventorySTEP 2: BOUND VARIABLES

STEP 3: Proforma MODEL

Office 850,550

Green Rent Premium 2% $0.70 PSF/Yr. $595,385

,Scheduled Gross Income

Office Space 850,550 Sq. Ft. $35.00 PSF/Yr. $29,769,250Signage Income $500,000 $0.6Plus: Parking Income 2,002 spaces $0 per mo. $0 $0.0____________ _____

Total Scheduled Gross Income $30,269,250 $35.6

Improved lease up for green product offering ($0.01) $308,646Plus: Recoveries $0____________

Effective Gross Income $28,086,817

Operating Expenses

(Less): Vacancy 10.00% of SGI ($3,086,464)

Operating ExpensesOperating Expenses

Management Fees $28,086,817 3.0% of EGI $842,605Janitorial Services 850,550 Sq. Ft. $1.25 PSF $1,063,188Window Washing 850,550 Sq. Ft. $0.25 PSF $212,638Repairs & Maintenance 850,550 Sq. Ft. $0.50 PSF $425,275Insurance $155,100,294 0.500% Costs $775,501Utilities (LEED Silver) 20% 850,550 Sq. Ft. $1.20 PSF $1,020,660Professional fees 850,550 Sq. Ft. $0.20 PSF $170,110General & Administrative 850,550 Sq. Ft. $0.50 PSF $425,275Security 850,550 Sq. Ft. $0.75 PSF $637,913Landscaping 850,550 Sq. Ft. $0.25 PSF $212,638Parking Expense not paid by Tenant $2,149,980Gr. Lease Payment $216,442RE T $247 113 601 1 0246% V l $2 531 926RE Taxes $247,113,601 1.0246% Value $2,531,926____________

Total Operating Expenses $10,684,151

Net Operating Income $17,402,666

Green Overlay

TOTAL NET GREEN OPERATING INCOME 17,402,666

Improvement to NOI 5.8%NET NOI IMPROVEMENT $952,350SIMPLE PAYBACK 9.2 years

TOTAL NET OPERATING INCOME 16,450,316

Building NOIBuildingValue

C R t=

Cap Rate

STEP 4: Use Results to Refine

Questions & Answers

Summary & DiscussionSummary & Discussion

High performance Rain harvestfacade

Shading devices

Extensive green roof

harvest system

devices

Awnings

Outdoor terrace

Partner gthat generate power

porch perimeter

EcoEcolobby

Local

Shade trees

Local green

materials