Net zero commercial building lease will share energy savings

Net zero commercial building lease will share energy savings

Photo via CBRE.

A multitenant commercial building in Boulder, Colorado, has cracked the code for sharing energy savings between the building owners and tenants.

Adoption of net-zero building has boomed, with 74 percent increase in certified and emerging net-zero buildings from 2015–2016, according to the Rocky Mountain Institute. Despite the growth, owner-occupied projects outpace leased net-zero buildings.

The problem has been the split incentives barrier, which pits owners and tenants against each other. In a typical net-zero project, the landlord pays for energy upgrades, but the tenants reap the benefits.

For a commercial real estate project, net-zero energy use can be a competitive advantage in attracting tenants. Net-zero properties can be up to 19 percent more profitable for developers who operate the property and 17 percent more profitable for developers who sell the property immediately, according to the Colorado Real Estate Journal. Net zero properties also tend to have higher occupancy rates, higher rent premiums and higher overall market value.

Sharing the savings

Boulder Commons developer Morgan Creek Ventures developed the first net-zero commercial lease in Colorado for the project.

For the 100,000 square-foot project two miles from downtown Boulder, the tenants will sign up for incentives to meet electrical demand through the on-site 575-kilowatt solar photovoltaic system.

Tenants, including the Rocky Mountain Institute, will sign up to stay within a plug load energy budget. If the tenant exceeds the budget, it will be charged a fee to offset the purchase of renewable energy certificates. Also, the landlord will meet with tenants that exceed the budget to find ways to reduce energy use.

The tenants have control over their own energy budget, and the landlord can accurately size the solar power system based on the budgeted loads.

The lease includes annual energy reviews to drive continuous improvement in the building's operation.

Energy offsets are another innovation. The lease requires that energy purchased from the electrical utility will be offset by renewable energy certificates. As a tenant, the Rocky Mountain Institute negotiated the ability to use a variety of offset resources, including community solar, energy efficiency certificates, green power from the utility or other clean energy sources.

Building for net zero

To achieve the goal of net-zero energy usage the building was designed for optimal light penetration to reduce the lighting load and overall energy usage while maximizing views and daylight for employees.

Other sustainable features include a tight, well-insulated building envelope, a highly efficient HVAC system, energy-efficient lighting, low-flow plumbing fixtures and a car-share program. Solar panels on the roof and east building facade are designed to produce as much energy as the building uses.

The interior of the buildings feature open floor plans that can accommodate tenants up to 28,000 square feet, plus access to outdoor deck areas. Courtyards, a coffee shop, on-site restaurant and lobby/common areas create spaces for people to gather and interact—both indoors and out. Bike lockers, showers and changing rooms enable employees to enjoy outdoor activities, including the adjacent multi-use path along Goose Creek.

“Boulder Commons is setting a new standard for responsible mixed-use development in our region,” Andrew Bush, principal with MCV Capital in Boulder told CBRE. “No other commercial project in the area combines the same levels of leading-edge sustainable design, top-quality tenant amenities and an ideal transit-oriented location.”


Topics: Building Green, Certification / LEED, Cost of Ownership, Energy Audits, Solar Power, Sustainability Trends & Statistics


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