COURTYARD BY MARRIOTT PORTLAND CITY CENTER

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1 COURTYARD BY MARRIOTT PORTLAND CITY CENTER SAGE Hospitality LEED Gold Certified

2 EXECUTIVE SUMMARY VERSION 2.2 CASE STUDY PARAMETERS The case study quantifies the cost premium for LEED Gold above the cost of a doing the same hotel on the same site without pursuing LEED. For example the credit for Public Transportation Access was considered zero cost because the site met the requirement. However, the Bicycle Storage and Changing Room credit called for program space and equipment not typically in the program, therefore a cost was accessed. Both hard and soft costs were analyzed. Incentives and utility cost reduction paybacks were also factored in. RESULTS The final analysis shows a 1.2% soft cost & hard cost premium to the project to pursue LEED Gold. After factoring in the Oregon incentives, the premium is eliminated. The energy and water conservation measures continue to pay back approximately $60,000 in savings each year. After 10 years, the property will save over $675,000 dollars in operating costs. Isolating the cash outflows and inflows related to LEED, the project realizes a 28.8% return on investment for funds spent on green initiatives. The property will benefit from a 30% reduction in energy costs and 26% reduction in water and sewer charges. It will also provide a healthy indoor environment to guests and employees. The green initiatives that will be achieved and verified via LEED certification will set the property apart from others. It will give the property the ability to gain market share from the growing number of groups and individuals who are concerned about the environmental performance of the hotels they choose.

3 SUSTAINABLE SITES CREDITS (10 of 14 possible) Site Selection $ 0 Development Density & Community Connectivity $ 0 Brownfield Redevelopment $ 0 Alternative Transportation, Public Transportation Access $ 0 Alternative Transportation, Bicycle Storage & Changing Rooms $ 2,400 Alternative Transportation, Fuel- Efficient Vehicles (operations cost per year - 2 yrs) $ 2,400 Alternative Transportation, Parking Capacity $ 0 Heat Island Effect, Non-Roof $ 0 Heat Island, Roof $ 0 Light Pollution Reduction $ 0 Total Cost for Category $ 4,800 BENEFITS Increased convenience for guests via car share program. Reduced impacts of transportation and associated carbon emissions. Mitigate on and off site environmental degradation. cost premium above typical

4 WATER EFFICIENCY cost premium above typical CREDITS (3 of 5 possible) Water Efficient Landscaping, reduce by 50% $ 0 Water Efficient Landscaping, no potable use or no irrigation $ 0 Water Use Reduction, 20% $ 16,240 Total Cost for Category $ 16,240 BENEFITS Reduced water consumption by 26%, almost equal to an Olympic size pool per year. Expected water utility cost savings for property of $5,880 per year. $124,716 reduction of City System Development Charges for efficiencies.

5 ENERGY & ATMOSPHERE cost premium above typical CREDITS (9 of 17 possible) Prerequisite: Fundamental Commissioning (soft cost) $ 40,000 Optimize Energy Performance, 30% (6 points) $ 188,800 Enhanced Systems Commissioning (soft cost) $ 25,000 Enhanced Refrigeration Management $ 0 Green Power, 35% for 2 year contract (operations cost) $ 10,000 Total Cost for Category $ 263,800 BENEFITS Reduced energy consumption by 30%, equivalent to consumption of 42 households per year. Expected utility cost savings for property of $57,686 per year. ENERGY MODEL 13% lighting 4% elevator 8% hot water Energy Conservation Measures: High Performance Glazing Increased Building Insulation High Efficiency Lighting High Efficiency HVAC Equipment High Efficiency Water Heater Simple Heat Recovery 23% misc. plug loads 14% fans & pumps 15% cooling 22% heating 9% hot water 4% elevator 8% lighting 22% misc plug loads 30% savings 10% heating 14% fans & pumps 4% cooling Baseline/Typical Construction Energy Consumption As Designed Energy Consumption

6 MATERIALS AND RESOURCES cost premium above typical CREDITS (4 of 13 possible) Construction Waste Management, Divert 75% from Landfill $ 0 Recycled Content, 10% $ 0 Regional Materials, 20 % $ 0 Total Cost for Category $ 0 BENEFITS Diversion of material from landfill. Reduced transportation of material. Reduced use of virgin material.

7 INDOOR ENVIRONMENTAL QUALITY CREDITS (11 of 15 possible) Outdoor Air Delivery Monitoring $ 23,960 Construction IAQ Management Plan, During Construction $ 14,250 Low-Emitting Materials, Adhesives & Sealants $ 0 Low-Emitting Materials, Paints & Coatings $ 0 Low-Emitting Materials, Carpet Systems $ 0 Controllability of Systems, Lighting $ 0 Controllability of Systems, Thermal Comfort $ 8,400 Thermal Comfort, Design $ 0 Thermal Comfort, Verification $ 0 Daylight & Views, Daylight 75% of Spaces $ 0 Daylight & Views, Views 95% of Spaces $ 0 Total Cost for Category $ 46,610 BENEFITS Comfortable & healthy indoor environment for guests and employees. cost premium above typical

8 INNOVATION AND DESIGN CREDITS (5 of 5 possible) Green Housekeeping Policy (operations cost) $ 2,000 Exemplary Performance: Public Transportation Access $ 0 100% Covered Parking $ 0 70% Green Power (operations cost) $ 6,720 LEED Accredited Professional $ 0 Total Cost for Category $ 8,720 BENEFITS Healthy environment for guests and employees. Marketing of green efforts to guests. cost premium above typical TOTAL LEED CREDITS TARGETED (LEED Gold 39 to 51 points) 41 TOTAL COST ABOVE TYPICAL BUILDING FOR SUSTAINABLE INITATIVES $ 342,570 TOTAL COST ABOVE TYPICAL BUILDING HARD COSTS ONLY $ 254,050

9 COST FOR LEED / SUSTAINABILITY BENEFITS ANALYSIS Courtyard by Marriott Portland City Center, Portland, OR - LEED Gold Target Opening Spring 2009 Values specific to the Pacific NW Soft Costs Incentive Registration $ 1,822 LEED Registration Fee $ 6,820 Commissioning $ 90,000 Energy model $ 23,850 LEED credit calculation $ 43,000 LEED process management $ 50,400 Total Soft Costs $ 215,892 Incentives State Grant Incentives $ 320,000 State Tax Credit Incentives (pass through) $ 193,324 Reduced City Development Charges $ 124,176 Total Incentives $ 637,500 Costs Premium After Incentives $167,558 Hard Cost Premiums above typical to achieve sustainability goals Sustainable Sites $ 2,400 Water Efficiency $ 16,240 Energy & Atmosphere $ 188,800 Materials & Resources $ 0 Indoor Environmental Quality $ 46,610 Innovation & Design $ 0 Total Premiums $ 254,050 Utility Cost Pay Backs & Operating Expenses Energy Cost Savings per year $ 58,035 Water & Sewage Cost Savings per year $ 5,880 Additional Ops Costs (one time) $ 2,000 Green Power & cost per year (2yrs) $ 8,360 Fuel Efficient Vehicle cost per year (2yrs) $ 2,400 Operations Cost Savings year 1 $ 52,355 Operations Cost Savings year 2 > $ 63,115 Operations Cost Savings 10 years $ 676,331 (assumes 2% utility cost increase per year) Soft & Hard Cost Premium 1.2% of cons. $ 469,942 Pay Back Period to Cover Premium (incentives received approximately 12 months after completion) 12 Months Nationwide Resource for Incentives: Database of Incentives for Renewables & Efficiency

10 COST FOR LEED / SUSTAINABILITY ROI ANALYSIS Courtyard by Marriott Portland City Center, Portland, OR - LEED Gold Target Values specific to the Pacific NW Depreciation Tax Savings assumes straight line depreciation, 42% tax rate, 40 year building life and 7 year equipment life. Utility cost escalation assumed at 2% Return on Investment 28.8%

11 COURTYARD BY MARRIOTT PORTLAND CITY CENTER SAGE Hospitality LEED Gold Certified energy & water efficiency - healthy indoor environment - ability to increase market share - 3 rd party verification

12 GREEN HOSPITALITY : EVERYTHING YOU EXPECT IN A HOTEL. ONLY BETTER Hospitality projects are complex, with demanding stakeholders who have diverse needs. SERA understands these needs and continually works to balance and prioritize them through the filters of great design and sustainability. We work with our clients to deliver elegant properties that provide enhanced returns on investment and create a built environment that is respectful of resources and beautiful in every way. SERA Architects Contact : Gary Golla garyg@serapdx.com