Category Archives: Financing

Energy Efficiency, Financing, Policy, USGBC LEED

USGBC-LA Hosts GREEN21 Resources

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g21-theme_logo

Between 2014-2016, California’s 25th District Senator Carol Liu sponsored the creation of the GREEN21 information portal. These resource pages have been created to help users from her district (parts of Ventura County and northern Los Angeles County) find information that will lead them to more green, sustainable choices for the 21st Century.

At the culmination of her term of office, Senator Liu decided that it would be a shame to lose these resources with the termination of her own website. USGBC/Los Angeles Chapter Executive Director, Dominique Hargreaves offered to host GREEN21 on the chapter’s website, which is where they now reside. The resources have been reformatted and posted by iPLUG Media to the USGBC site.

The contents of GREEN21 now reside under the About Us menu item, because of USGBC website menu formatting considerations. When GreenBuild 2016 completes, the menu item for GreenBuild will be replaced by Resources with a drop down menu for the following markets:

Additional information more central to the Los Angeles Chapter are being added – for instance, information about the Mayor’s pLAn and the Los Angeles Better Building Challenge (LABBC). Recommendations for new public information and links are requested so that they can be considered for inclusion on the site.

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Economics, Financing, Policy, Reports

PACE Now: Lender Support Study

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TreePeopleCenterPACENow is pleased to release the Lender Support Study, which surveyed national, regional and local mortgage lenders whose interests in buildings could be affected by PACE financings. PACE programs in Washington, D.C., Los Angeles, and San Francisco retained PACENow to develop and implement the survey, with grant support provided by the Urban Sustainability Directors Network.

There is apprehension that lenders will be hesitant to support permitting PACE financing to current mortgages.

The Lender Support Study’s goals included gauging lenders’ awareness and understanding of PACE, educating them, addressing their concerns, and developing insights that will enhance efforts to gain their support for individual PACE projects. Click here to download the study that summarizes the findings of interviews conducted with 35 individuals representing 25 different lending institutions.

Key findings and recommendations:

  1. Surveyed lenders generally expressed no blanket opposition to PACE. Their right to consent to projects is of paramount importance to them, but they appear open to approving projects that benefit their customers and improve the value of their collateral. Lender partnership and education from the start is the key in improving probability of lender consent.

  2. Lenders support energy efficiency and renewable energy projects in concept, but have little firsthand experience financing them and are wary of underwriting the resulting projected savings and benefits. Education based on standard industry data and results from comparable projects is necessary to increase ease of approvals and create streamlined the processes.

  3. Lenders understand property taxes and assessments and factor them into underwriting models decisions. There was broad acceptance of PACE as an assessment, which limits lien exposure only to unpaid assessments, distinguishing it from a loan.

  4. Complexity in applications contributes to increased costs and may make some projects economically unfeasible. The size and scope of a PACE assessment should determine the degree of supporting documentation. A simple, streamlined approval process for small projects (representing less than 3% of building value) should be developed with the lender community.

  5. Consistency of programs across states and the nation, standardization of data sources, and creation of project related insurance policies will improve the consent process as lenders (and PACE finance providers/investors) can create national approval platforms and review projects with fewer resources.

  6. Existing commercial mortgage lenders have only an indirect revenue benefit from providing consent. As such, applicants have the onus of making the approval process easier for lenders until revenue streams across banks are properly aligned or existing mortgage lenders begin to provide PACE financing.

DOWNLOAD THE STUDY…

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Economics, Energy Efficiency, Financing, Policy, Reports

Overcoming Market Barriers to Advance Energy Efficiency

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EEMarketBarriersU.S. energy use is approximately half of what it would have been if we had not improved our efficiency over the past 40 years. Still, there are large, cost-effective opportunities to increase energy efficiency much further, thereby helping us to cut energy bills, reduce pollution, and encourage economic growth.

While there is disagreement among politicians about the role of government spending and government regulations to spur cost-effective energy efficiency investments, politicians of all political stripes agree that knocking down market barriers that keep Americans from saving money is a worthy task.

Within this context, the American Council for an Energy-Efficient Economy (ACEEE) released a new report on Monday highlighting 16 policies that would use market forces to spur additional cost-effective investments in energy efficiency while helping to surmount market barriers that hinder these investments. In total, these policies could save consumers and businesses nearly $1 trillion over the 2014-2030 period, considering both the energy bill savings and the cost of the energy efficiency investments.

The new ACEEE report, Overcoming Market Barriers and Using Market Forces to Advance Energy Efficiency, discusses several targeted policies that leverage market mechanisms in order to address specific market failures, without requiring substantial spending or government mandates. For example, the development of a comprehensive building labeling and benchmarking program would allow purchasers and tenants to identify efficient homes and commercial buildings and could save consumers and businesses approximately $60 billion between 2014 and 2030. Even more impressive are the benefits gained from adjusting corporate tax legislation to remove hidden barriers in the tax code. These adjustments would encourage the replacement of inefficient equipment and remove regulatory barriers to combined heat and power projects. These two policies alone could save the economy close to $300 billion.

Recommendations fall into 7 categories:

  1. Improving information to aid decision making

  2. Removing exiting regulator and legal barriers

  3. Addressing externalities

  4. Increasing the salience of energy use at point of purchase

  5. Reducing energy waste in government

  6. Investing in precommercial R&D

  7. Enhancing energy efficiency finance

READ ABOUT 16 POLICIES THAT COULD SAVE THE U.S. ECONOMY ALMOST $1 TRILLION…

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Economics, Energy Efficiency, Financing, USGBC LEED

How Energy Points Help CFOs Budget for Sustainability

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NetZeroBuilding

Where Simplicity Meets Accuracy…  Energy Points is a simple, accurate and actionable solution that allows organizations to manage and plan the consumption of energy resources across their operations, products and supply chains using the first data driven universal metric.

Ory Zik, founder and chief executive officer of Energy Points, believes many CFOs shy away from even thinking about sustainability because they struggle to determine the most cost-effective solutions. A Deloitte survey of 250 CFOs of companies with more than $1 billion in revenue in 2012 found that superior sustainability information is still somewhat elusive. Only 12 percent of CFOs believed they had “excellent” sustainability information, while 37 percent rated their information “good” and another 37 percent called it only “adequate.”

Sustainability reports are emerging as a critical driver of shareholder value. According to a January report from the Governance & Accountability Institute, 53 percent of the S&P 500 issued sustainability reports in 2011, a huge increase from 2010’s 19 percent. But Zik believes most of these reports are all but unintelligible.

The universal sustainability metric

The problem is that businesses that look at greenhouse gas emissions, kilowatt hours for electricity, BTUs for gas and gallons for water — and then keep them separate — are bound to get confused. What Energy Points does is to use a gallon of gasoline as a baseline. Its algorithms convert all other types of energy — electricity, water, oil, natural gas — into a metric relative to that gallon of gasoline. In that way, a CFO can derive one number to determine his organization’s energy use no matter what kind of energy is critical for the business, and track that cost, using it to drive strategic decisions.

With Energy Points’ application, what CFOs see is an interpretation generated by that algorithm that is easy for them to understand. “It’s like the iPhone,” Zik says. “The front is intuitive; the complexity is inside.”

Read More…

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Economics, Financing

Commercial Property Lease Terminology

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ComlLeaseTerminologyThere are numerous forms of leases. The most common of these is the Triple Net lease. In a Triple Net lease, the tenant is responsible for their proportionate share of property taxes, property insurance, common operating expenses and common area utilities. Tenants are further responsible for all costs associated with their own occupancy including personal property taxes, janitorial services and all utility costs.

If the space is part of a larger building, the common area maintenance charges (CAMS) will be divided among the tenants of the building, generally based upon the tenant’s square footage percentage of the overall complex. In general, the landlord will be responsible for the structural integrity of a building.

NET LEASES

As with modified gross leases there are numerous forms of net leases. The most common of these is the Triple Net lease. In a Triple Net lease, the tenant is responsible for their proportionate share of property taxes, property insurance, common operating expenses and common area utilities. Tenants are further responsible for all costs associated with their own occupancy including personal property taxes, janitorial services and all utility costs.
This type of lease is rarely utilized in a multi-tenant office building. As with a modified gross lease, a modified net lease is also available. There are no set standards as to what costs may be excluded in a modified net lease; the lease is usually customized according to need.

Types of Net Leases
Net leases define the responsibilities of the landlord and the tenant differently.  The following are types of net leases:

  1. Single Net Lease – A single net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes.  The landlord is responsible for all other operating expenses of the premises.

  2. Double Net Lease (NN) – A double net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes and the property insurance.  The landlord is responsible for all other operating expenses of the premises.

  3. Triple Net Lease (NNN) – A Triple net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes, the property insurance, and the maintenance.  Under a triple net lease there are a few legal defenses which may relieve a tenant of his responsibilities.  For example, a triple net lease may relieve the tenant of his responsibility if the property is subject to an eminent domain proceeding.

  4. Absolute Triple Net Lease (Bond Lease) – An absolute triple net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes, the property insurance, and the maintenance.  Under an absolute triple net lease there are no legal defenses if a tenant fails to meet his responsibilities.

REALTECH is dedicated to providing the best investment commercial real estate and representing clients who are interested in purchasing commercial property. Interested in applying the philosophy of efficiency and business ethics in residential or commercial real estate business.

READ MORE…

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Economics, Energy Efficiency, Financing, PACE

Keeping “PACE” with Energy Efficiency Upgrades

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PACEfinancingClay summarizes the current status of the PACE program, its program benefits to the property owners, and the Prologis case study that closed in San Francisco in November, 2012.

Johnson Control’s Clay Nesler unveils how PACE financing can help commercial property owners defer upfront costs in seeking to install energy efficiency building upgrades. Click here to see the video presentation.

In his role as vice president of Global Energy and Sustainability for Johnson Controls, Clay Nesler leads a worldwide team responsible for coordinating marketing, legislative affairs, resource management, product/service innovation and energy program management. Nesler’s responsibilities also include leading a professional services organization that develops collaborative planning tools and provides consulting services to Johnson Controls customers and third-party clients on a global basis.

Since joining Johnson Controls in 1983, he has held a variety of leadership positions in technology, new product development and marketing in both the United States and Europe. Nesler received his bachelor’s of science and master’s of science degrees in mechanical engineering from the University of Illinois at Urbana-Champaign, and is listed as a co-inventor on 10 patents.

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Economics, Energy Efficiency, Events, Financing, Opinion, Technology, USGBC LEED

SoCal Gas Energy Resource Center Seminars

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SCGDowneyResourceCenter

The Energy Resource Center in Downey, California is an energy efficient resource for making environmentally-preferable decisions. The facility is 44,572 square feet and earned LEED certification at the certified level in 2009. As a showcase building for environmental and energy efficiency, the Energy Resource Center is pursuing LEED for Existing Buildings: Operations & Maintenance recertification at the Gold level.

Want to learn about the latest in energy-efficient equipment and technologies? Attend technical and foodservice-related seminars at Southern California Gas’ LEED® Certified Energy Resource Center (ERC) in Downey, CA.

ERC at a Glance

This resource center for energy and environmental decision-makers opened in the spring of 1995 in Downey, California, the heart of the Greater Los Angeles and Orange County metropolitan areas. The building is an award-winning model of energy-efficient, environmentally friendly technologies. And an array of practical seminars, demonstrations and consulting services can help businesses find the most cost-effective and energy-efficient solutions to their energy needs.

A visit to the Energy Resource Center can expedite your search for new equipment, while ensuring you have the information you need to make wise choices. And, there’s never a charge for equipment demonstrations.

Seminar Schedule & Enrollment

Seminars like these are just part of our commitment to providing exceptional service.

  1. Sign Up for Technical Seminars

  2. Sign Up for Building Operator Certification Seminars

  3. Sign Up for Food Service Equipment Center Seminars

  4. Seminar Terms & Conditions

Food Service Equipment Center

The Food Service Equipment Center showcases the right equipment to spice up your bottom line.

  1. Call 562-803-7323 to schedule a visit.

  2. Sign up for Foodservice Seminars

  3. Seminar Terms & Conditions

Exhibiting and Speaking Opportunities

Exhibit and/or speaking opportunities exist for many Energy Resource Center (ERC) and Food Service Equipment Center (FSEC) seminars and displays.

  1. Email the Energy Resource Center at erc@socalgas.com

  2. Email the Food Service Equipment Center at ercfoodsvc@sempra.com

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Economics, Energy Efficiency, Financing, Policy, Renewable Energy, Reports

World Economic Forum: Catalyzing Retrofit Finance and Investing in Commercial Real Estate

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CitySkyline

 This report  is the product of the Retrofit Finance & Investing Project, a cross-industry, multi-stakeholder initiative of the World Economic Forum launched in 2010.

The report equips policy-makers and industry leaders with the information and tools needed to build and scale retrofit markets around the world. It highlights the business potential waiting to be tapped by multiple industries and underscores the acute importance for government leaders to take action now: to ensure a resource-secure, low-carbon future and to benefit from the economic and job creation potential that retrofitting promises. It calls to action the range of existing and potential stakeholders to fully and jointly participate in growing a healthy retrofit market, including government, financial service institutions, investors, property owners, utilities, equipment manufacturers, energy service companies and other related industries. Finally, it provides industry-specific recommendations to enable their participation.

The U.S. potential is reported by C40 Cities…

$400 billion market potential in building retrofit market

A new study from the World Economic Forum (WEF) has found that retrofitting commercial buildings could represent a $400 billion market in the U.S. alone. Citing C40’s own study with the Carbon Disclosure Project, WEF says:

“Any successful approach to combating climate change must include commercial buildings, which are responsible for approximately 30% of greenhouse gas emissions worldwide and, in some countries, 70% of electrical consumption. Nearly one-half of all energy consumed by buildings could be avoided with new energy-efficient systems and equipment, and the energy savings would exceed the cost of upgrades, generally within five years or less.”

The report also found that governments are “the single greatest catalyst” for a thriving retrofit market, a conclusion supported both by C40’s research with Arup showing that mayors from C40 Cities have strong powers in this sector – and by action on the ground across the C40 network.

Earlier this month, C40, CCI and Los Angeles announced the city’s launch of a major effort to spur commercial retrofits through a new program offering both technical and financing support; the program is a participant in the U.S. Department of Energy’s Better Buildings Challenge. A similarprogram has also been created by Melbourne. Chicago is serving to catalyze the city’s retrofit market by targeting an iconic government building; while in Mumbai, it is a commercial real estate giant who is a first mover. In June, Houston Mayor Annise Parker made C40 proud by winning  the 2011 Mayors’ Climate Protection Award for the city’s green building leadership in the public and private sectors.

READ MORE…

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Economics, Energy Efficiency, Financing, PACE, Reports

PACE Financing in Los Angeles County

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 PACEinLA As part of Energy Upgrade California, owners of non-residential commercial properties in Los Angeles County have access to an innovative financing mechanism to fund up to 100% of the cost of building performance upgrades—Property Assessed Clean Energy (or PACE) financing. 

Investment in energy and water efficiency is an intelligent business decision. Building performance upgrades bring multiple benefits:

  1. Lower operating costs

  2. Improve occupants’ comfort

  3. Hedge against utility price increases

  4. Reduce negative exposure to possible regulation

  5. Help the environment

  6. Boost property values

Why PACE?

  1. Funding for up to 100% of installed project costs

  2. Lower financing rates than other products in the market

  3. Longer financing terms than would otherwise be possible

  4. Enables projects to be cash flow positive in Year 1

  5. May allow for favorable accounting treatment

  6. Allows for equitable sharing of costs and savings with current tenants, and future owners

What is PACE Financing?

For more information visit http://www.cleanfund.com/

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Energy Efficiency, Financing, PACE, Policy

Property Assessed Clean Energy (PACE) Funding

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PACEtallBldgs

Building Performance Tracking is the process of analyzing a building’s operations and energy consumption over time to identify anomalies and areas for potential improvement.

Measurement and Verification(M&V) is a process of using actual measurement, calculation, and/or modeling to reliably determine actual energy/utility savings achieved within a facility by an energy management, energy conservation, or energy efficiency project.

The PACE structure was enacted into California State law in 2008, to help property owners fund efficiency upgrades and onsite clean power generation projects. Under PACE property owners can negotiate project-specific financing terms with the investor(s) of their choice, and repay the cost of the upgrade over time through a voluntary contractual assessment on the property tax bill. PACE can be used to fund a range of building performance upgrades, from high-efficiency lighting retrofits, to advanced controls systems, to installations of fuel cells and solar photovoltaic power generation.

And because PACE assessments are fully secured through contractual assessments, capital providers have the security to offer financing at lower rates and over longer periods of time than has been possible until now. This combination of lower rates and longer terms improves the economics of deeper energy efficiency upgrades and on-site power generation projects, and allows for positive cash-flow from day one.

PACE is voluntary, not mandated by the government. It provides long term funding from private capital markets at low cost, and requires no subsidies. PACE raises property values by making buildings less expensive to light, heat, and cool and enjoys broad-based support nationwide. PACE enabling legislation has been adopted by 24 states in just 24 months, and there are dozens of programs in operation and in development around the country today.

For more information visit http://www.cleanfund.com/

 

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