Burnham-Moores Center for Real Estate University of San Diego Master of Science in Real Estate Presentation. HVAC Systems.

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1 Burnham-Moores Center for Real Estate University of San Diego Master of Science in Real Estate Presentation HVAC Systems March 5, 2013 Justin Farrar Please do not quote or use this presentation without appropriate recognition. Thank you!

2 Productivity can be negatively impacted upwards of 11% if environment is outside of the comfort zone.

3 DOE estimates that buildings represent 39% of the total U.S. energy consumption (2006) Source: Center for Climate Energy Solutions

4 Commercial sector buildings energy use estimates (2008) Source: DOE, 2008 Buildings Energy Data Book, Section 3.1.4, 2008

5 Retrofit or complete replacement strategies both contain hurdles and difficulties CAPEX Financing Cash outlay HVAC Decision Maintenance Energy Costs Personnel Consumables Equipment Price of energy Consumption Decision to go green is not always simple. It must meet company and/or asset strategies Holding Period Long term Short term Squeeze $ out

6 Chiller technology: chilled water is distributed to heat exchangers which cools the air for circulation Cooling coils transfer sensible and latent heat from air to the chilled water Works to cool and dehumidify the air stream Source: American Society of Heating, Refrigerating and Air-Conditioning Engineers

7 Inherent problems arise in this type of system Uneven air distribution Uneven temperatures Varying system loads Energy lo$$

8 Retrofitting strategies that payoff: savings can yield upwards of $10 - $20 per square foot For a 25,000 SF space, savings can be as high as $125,000 to $300,000 per year for heating, ventilation, and cooling improvements $3 - $7 $2 - $5 $3 - $5 $1 - $2 Minimal Plug Load Heating Ventilation Lighting Cooling Source: The Economics of Green Retrofits, Kok, Miller, Morris

9 Innovation: Retrovent Replacement Program avoids extensive renovation costs -Simplifies replacement of 20-ton and larger air handlers with energy-efficient, direct-match units. -Matches existing roof curbs and supply/exhaust connections to minimize the cost of roof and building renovation. -Air handlers to reduce operating costs: direct drive variable-speed fans, variable-speed compressors, and modulating gas or electric heat. -Programmable controls improve communications with existing building systems. -Lease-to-own, recycling old units, install new unit, and start-up services. Source: innoventair.com/retrovent

10 Lennox icomfort Wi-Fi Touchscreen Thermostat: cloud connectivity will allow remote climate control -Easy-to-use interface -Manipulate climate controls from smartphone, tablet, laptop, etc. -Forecast option allows users to prepare for conditions in advance

11 Golden Corral expects 8-month ROI on $252,000 investment after installing efficient HVAC system 30 stores Typically paying $9,000 pspm for gas and electricity Expected savings: $700 pspm HVAC fleet : aged 0-25 years Method: accelerated depreciation, rebates of $5,000-$8,000 per store Temperature is more comfortable for staff and guests. Source: Environmentalleader.com

12 Summary: Long-term savings can be realized through HVAC upgrades, however, immediate benefits can also be realized through retrofitting. The amount of energy consumed by HVAC is significant enough to warrant attention. Savings is significant enough to warrant action.

13 References HVAC Systems: Overview, Michael J. Brandemuehl, Ph.D., P.E., University of Colorado Boulder. Center for Climate and Energy Solutions, DOE, 2008 Buildings Energy Data Book, Section 3.1.4, 2008 American Society of Heating, Refrigerating and Air-Conditioning Engineers, Air Conditioning, Heating, and Refrigeration News, Energy Star website, Environmental and Energy Management News, Department of Energy Buildings Energy Data Book,

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