Energy-efficient office buildings turn realty company into an Energy Star
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With more than 32,000 sq. ft. of PV panels, the City Centre office complex in Fountain Valley, Calif., is one of the largest solar energy systems in the Western Hemisphere. (Photo courtewy of Arden Realty.)
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Being Southern California's largest commercial landlord wasn't enough distinction for Arden Realty, so the Los Angeles real estate management firm set out to cut energy costs across its portfolio of 20 million square feet in 253 buildings.
In the process, the real estate investment trust created one of the largest private commercial solar power systems in the Western Hemisphere and won national recognition. Those were some nice fringe benefits to an annual energy savings of 40 cents to $1 per sq. ft. derived from Arden's wide-reaching program of efficiency measures.
Efficiency upgrade gives buildings competitive edge
The road to acclaim and savings began as so many energy efficiency projects do, with an eye on the bottom line. "In property management, there are two ways of increasing revenue," explained Scott Lyle, president of next>edge, Inc., Arden's energy solutions subsidiary. "You can either raise rates, which the market may not allow, or you can lower operating costs. Energy expenses are a cost that offers tremendous potential for savings in office buildings."
Arden deployed two staff engineers, now with next>edge, Inc., to perform an energy audit of its holdings, walking through each facility with a proprietary energy survey. The REIT also carefully tracked its utility expenditures to identify spikes in use. From that research came a plan that regional, chief and building engineers could implement and use to maintain efficiency gains.
The list of recommendations ranged from simple lighting retrofits to installing the latest in climate control technology. Arden tapped several vendors to make extensive mechanical equipment modifications and retrofits to each facility as needed. "Arden is 'tech neutral' — that is, we are not married to one particular product or technology," said Lyle. "Using the 'best of class' approach, we choose our engineering solutions based on the unique circumstances of each site."
Measures included installing numerous building automation systems to integrate the control and monitoring of such building systems as HVAC, lighting and fire/life safety. After-hours tenant billing systems and lighting control added to both energy efficiency and overall building performance.
Grants, partnerships turn office building into solar generator
As the real estate developer was implementing its energy enhancement plan, an opportunity arose to become a partner in a different kind of development. The U.S. Department of Energy and the California Energy Commission offered grants to businesses to develop solar energy. Arden joined the California Public Employees Retirement System, RREEF Real Estate Investment Managers, DTE Energy of Detroit and RealEnergy Corp. to take one property from energy efficient to energy producing.
Located in a suburban office park, out of any skyscraper's shadow, the three-story City Centre office building in Fountain Valley, Calif., looked like a possibility for the project. Its 33,500-square-foot floor plate and a roof with few mechanical systems confirmed the facility's status as the ideal candidate.
PowerLight Corp., a Berkeley, Calif.-based company, built and installed the advanced photovoltaic array. The roof tiles, designed for flat to moderately sloped roofs, are backed with a special foam that turns the sun's energy into usable power while increasing the building's thermal insulation. The tiles interconnect and operate without moving parts or batteries. "Other than basic maintenance and cleaning, the array has been pretty much hands-free in its operation," acknowledged Lyle.
RealEnergy Corp. owns the acre of panels and sells their generation back to the facility at a discount. Lyle recommends that businesses considering similar projects do a financial study to see if the economics are reasonable. "Incentives are very helpful in offsetting the greater cost of solar power," he added.
The City Centre fired up 2,390, 100-watt roof tiles on December 6, 2000. Their output of 239 kW, or 7.5 watts per sq. ft., is equivalent to the amount of electricity needed to power more than 240 single-family homes. The Fountain Valley system provides about 10 percent of the building's energy needs, and a hedge against increasing energy costs that Arden can pass on to tenants.
Award-winning energy enhancement precedes energy crisis
The U.S. Environmental Protection Agency's Energy Star program honored Arden Realty's achievements in energy efficiency in 2000, naming it the Commercial Real Estate Owner of the Year for owning the most energy efficient buildings in one portfolio. Arden has since earned 101 Energy Star awards and owns 101 of 321 buildings in California to meet the program's standards for energy efficiency.
Over the last six years, Arden Realty has spent $25 million to increase energy efficiency across its portfolio. Much of that investment came before California's energy crisis, Lyle enjoys pointing out. He attributes his company's foresight to the staff's extraordinary depth of experience and "good, old-fashioned engineering. With that on our side, we didn't need an energy crisis to figure out that responsible energy use is going to have a positive impact on operating costs," he said.