BOMI International Boost
POSITIVELY IMPACT YOUR BOTTOM LINE
Smart & Efficient
As a property or facility manager, the day-to-day tasks and the decisions you face are centered on your bottom line. Non-efficient operations and unhappy tenants can lead to many complications, including extreme cost spikes, resulting in a negative impact to your bottom line. Laying the right groundwork ahead of time to ensure your buildings and properties are efficient, while being cost-effective, can help avoid such scenarios. This issue of the Boost will provide you with articles, expert insight, and information about educational programs that will help improve building efficiency, ensure tenant comfort, and increase asset value and cost savings.
Finding your building’s thermal comfort zone.
Zoning is the division of a building's heating and cooling systems into sections that permit independent control of temperatures from one area to another. Zoning of an air-distribution system compensates for the differing heating and cooling loads. For example, the west exterior rooms of an office building are subject to a daily periodic fluctuation of heat gain due to the movement of the sun. The load varies from a minimum during the morning, when the western exposure is shaded, to a maximum around 4:00 p.m., when the western exposure receives the greatest direct solar radiation. On the other hand, the exposed northern areas of the same building are affected little by direct solar radiation and consequently have a minimal external load. A zoned HVAC system compensates for the differing heating and cooling needs of these west- and north-facing areas.
The need for cooling is caused by the heat load that is placed on the building by the weather and the occupants of the building. Outdoor variables include how the building is oriented toward the sun, its elevation, and the local weather patterns. Some indoor variables are the activities and the average and peak activity levels of the occupants in a given part of a building or space. The building's mechanical, lighting, and electrical systems and their usage patterns also affect the heat load. The architectural features and materials in a building contribute to how it stores heat and thus often drive HVAC system selection and configuration. For example, if a structure's façade calls for high proportions of exterior glass, the result will be a high degree of heat gain during hot summers and heat loss in cold climates.
A zone consists of areas that react thermally over time in a similar fashion and can be controlled from one thermostat. Every building has its own set of characteristics that influence how to make it comfortable for its occupants, but most have some qualities in common. The perimeter sections of a building are generally about 15 feet inward from the outside wall. This area of the building can be designated a perimeter zone. The minimum number of control zones required for a floor will be five: a perimeter zone for each face of the building—north, east, south, and west—and one interior zone.
Loads on interior zones may fluctuate as a result of people loads. This is especially true in conference and meeting rooms, where separate zoning may again be required. Some occupants may request and be willing to pay for separate zoning of their offices, even when zoning may not be essential for good performance. Zoning is required for satisfactory HVAC performance in most buildings and should be provided for all locations where the load fluctuations, expressed as percentages of the total maximum design load, are great.
Calculations of theoretical heat gains may indicate that zoning is essential. However, a heat gain from solar radiation through glass often does not constitute an immediate load on the cooling system. Radiant energy received by the room's solid surfaces must be absorbed and then transferred as convective heat to the room air before it becomes a part of the load on the air-conditioning equipment. The resulting time lag ultimately causes the heat to be released at a lower and more uniform rate than it was received. Such storage effects lessen the need for rigorous zoning and explain why some installations that appear to be inadequately zoned provide satisfactory performances.
A multizone system heats and cools several zones—each with different load requirements—from a single, central unit. A thermostat in each zone controls dampers at the unit that mix the hot and cold air to meet the varying load requirements of the zone involved. The following steps can be taken to improve energy efficiency of multizone systems:
- Reduce hot deck temperatures and increase cold deck temperatures. While this will lower energy consumption, it also will reduce the system's heating and cooling capabilities.
- Consider installing demand reset controls, which will regulate hot and cold deck temperatures according to demand. When properly installed and with all hot deck or cold deck dampers partially closed, the control will reduce the hot deck and raise the cold deck temperature progressively until one or more zone dampers are fully open.
- Consider converting systems servicing interior zones to variable volume. Conversion is performed by blanking off the hot deck, removing or disconnecting mixing dampers, and adding low-pressure VAV terminals and pressure bypass.
This article is adapted from several courses in BOMI International's Systems Maintenance Administrator (SMA®) professional designation.
Maximizing utility cost recovery.
As a facility manager, you have many opportunities to reduce the impact of utilities on your bottom line. In addition to buying utilities at the lowest cost, you need to recover as much of the utility expenses as possible. This can be accomplished through a utility cost recovery lease clause, or, internally, through a chargeback system. Various methods are used for utility cost recovery. These methods are often subject to state laws. Before using them, the manager must ensure they are allowed.
Submetering offers a way for landlords to earn a profit by charging tenants a higher rate for utilities than the rate that the landlord pays. The landlord purchases a utility through a master meter and has submeters installed for individual tenants in order to pass the charges on according to specific consumption. The ability to submeter utilities varies from state to state. Some states prohibit submetering, while others encourage it as a green practice. States that prohibit submetering often allow temporary metering, called check metering or information metering. Such metering is sometimes used with energy rent inclusion to check the accuracy of estimates. In addition to staterestrictions, utility companies may have their own prohibitions.
Energy Rent Inclusion
In states that do not permit submetering, another option is to establish a lease provision charging additional rent for utility use. This provision is often called energy rent inclusion. With a provision for energy rent inclusion, the amount and cost of energy for each tenant or area is estimated, typically proportional to the rentable square footage. Estimates, often referred to as base rates, are established at initial occupancy, usually by an engineer or specialized consulting firm. They may be altered during occupancy to reflect changes in actual energy use and changes in energy costs.
Some lease clauses limit the amount charged to what the tenant would have paid at the applicable utility rate. When this type of clause exists, the local utility rate should be used as a guide. Energy estimates are often inaccurate, especially over the long term. To guard against overcharging or undercharging, a balance should be tabulated. The estimated utility use for all tenants along with common areas should be totaled. That total should then be compared with the total amount recorded on the utility meter by the utilities serving the building.
Utility Cost Allocation
Another technique, utility cost allocation, is less costly than submetering. It requires less equipment—in some cases, no equipment at all. One approach to utility cost allocation is to prorate utility costs by square footage occupied. When the character and hours of energy use are similar for all tenants, this can be a reasonable method. Each area to be billed is assigned a certain fraction of the total use of each utility. Every month, that same fraction is applied to the landlord's utility bill to determine each tenant's bill.
This method is fair only when utility use is uniform. When utility use is not uniform, some forms of surrogate measurement can be used in an attempt to estimate and assign utility use more fairly. These surrogate methods use such devices as hours-of-operation counters, temperature measurement, or flow measurement. Utility cost allocation is then adjusted according to the readings made by these devices. The totals from all the devices are gathered, and various formulas are used to set the fraction of utility cost allocated to each tenant.
Many state laws on submetering may also apply to utility cost allocation, so check your local laws.
Tenant Utility Auditing Firms
Some tenants that lease space in many locations employ independent utility auditing firms or have their own staff perform utility audits. More and more utility auditing firms are marketing their services to tenants. These firms usually work on a contingent-fee basis, sharing any refunds and reductions equally with the tenant. Every submetering or cost-allocation installation should be capable of withstanding the scrutiny of an independent audit. Submeter calibration and certification should be done periodically to ensure accuracy.
Most leases state normal building operating hours, with specific provisions and charges for after-hours use. The most common charge for after-hours use is for heating and cooling. The landlord and tenant agree on a dollar figure or formula to be used. All too frequently, however, these charges do not cover the actual cost.
There are other factors that should be considered in after-hours charges. If tenants require heating and cooling, they also require power for lighting and equipment. The energy consumed should be included in the charges. Also, any additional energy consumed in common areas should be included. This is yet another reason why submetering is preferred; the exact amount of energy used can be calculated, allowing the owner to recoup all utility costs. The facility manager should document after-hours charges to clearly show how the charges were set initially, as well as how charges are updated to reflect changes in utility and labor costs.
Excess Energy Use
Leases often have clauses to cover excess use of energy. Energy used by normal office equipment during normal office hours is included in the rent, but any special equipment or additional hours are billed separately to the tenant. This separate billing can be figured either by estimate or by submetering. Another approach is to include a specified quantity of energy use, most often of electricity, in the rent. Monthly meter readings are taken through submetering the space. If the consumption exceeds specifications, an additional charge is applied.
Common-Area Cost Allocation
Although most leases have provisions describing how common-area costs are distributed to tenants, they rarely describe in detail how those costs are determined. The manager should maintain a documented and consistent method for common-area cost allocation when submetering is used.
- When all common-area services are on individual meters directly from the utility company, these costs are easy to calculate. Simply total all of the common-area utility bills. The method for calculating the cost of that consumption must then be documented for each tenant.
- If the common areas are not submetered, then the common-area consumption must be calculated. The consumption on the tenant submeters is subtracted from the total quantity bought, leaving the common-area use. Cost can be allocated by the same methods used when common-area consumption is submetered.
- When the common-area cost includes central heating and cooling systems, an additional step must be taken. The consumption or revenue for after-hours use should be subtracted from the common area use so that tenants are not required to cover the cost of these systems when their buildings are unoccupied.
Utility Cost Escalation
In a building that is not submetered, utility cost escalation is usually determined as the amount that the current year's cost exceeds the base year's cost. In submetered buildings, there is no need to apply utility cost escalation, provided that the method for billing submeters follows the traditional procedures described above. If an alternative procedure is followed, it must be well documented and communicated to the tenants.
This article is adapted from BOMI International's The Design, Operation, and Maintenance of Building Systems, Part II course.
Expert insight on effective energy management and sustainability strategies.
Carlos Santamaria, LEED®-AP, RPA®, Vice President of Engineering Services, Glenborough, LLC
Carlos Santamaria has worked in commercial real estate, concentrating in property management, engineering and construction operations for over 25 years. He is currently the vice president of engineering services at Glenborough, LLC, where he leads the sustainability program. The program has proven very successful, resulting in four straight years of recognition for Glenborough as an ENERGY STAR® Partner "Top Performer."
Mr. Santamaria has also been involved as a Building Owners and Managers Association (BOMA) California Energy Committee member since 2008, a Realcomm International Advisory Council member, and is a Subcommittee Member/Co-Chair with the Department of Energy (DOE) Commercial Real Estate Energy Alliance group. Furthermore, he is a renowned industry speaker, participating in panels and conducting presentations that discuss and advise on energy efficiency and sustainability strategies.
Mr. Santamaria has an undergraduate degree in business from Saint Mary's College and an Executive M.B.A. from the University of San Francisco. He also holds a California General Contractor license, a California Real Estate Broker’s license, a BOMI International Real Property Administrator (RPA®) designation, and is a LEED® Accredited Professional (LEED®-AP) O + M.
As the vice president of engineering services for Glenborough, LLC, you have developed and implemented a national energy management and sustainability strategy that has resulted in improved building efficiency and cost savings since 2004, thus positioning your company as a leader in energy management and sustainability. What are the most important elements to take into consideration in order to generate, as well as maintain, an effective energy management and sustainability strategy?
I truly believe one must have the passion, dedication, and desire in managing energy resources. For years, the focus of property management has always been about the tenants, revenue, and how your building showed. Today, even though tenant relations, retention, and building appearance are still high priorities, to be considered a “top notch” real estate organization in today’s tough economy, an organization must be able to differentiate itself in how it manages precious energy resources. Organizations must have energy leaders willing to take chances based on well-calculated decision-making skills while pushing their operations towards being as efficient as possible.
You have successfully managed many projects, including the Aventine LEED® project, an office building that is only one of five multi-tenant, 20-plus-year-old office buildings to have received an ENERGY STAR® score of 100 and a LEED® Platinum certification. What advice would you give to other professionals who are trying to achieve the same level of success in transforming inefficient buildings into high-performance operations?
Be opened minded towards all energy cost saving opportunities, innovations, operational best practices. And, most of all, be patient! Building upgrade opportunities present themselves in many ways over time and through various phases. Take time to research what is working in the industry so you can understand options and alternatives with spending capital funds. Do your homework and challenge both yourself and your organization towards achieving higher levels of success with these projects.
After all, achieving energy and sustainability levels such as the Aventine Office Building is more of a reflection of the leadership at any organization. I’m fortunate to be part of an organization such as Glenborough that supports and encourages excellence in how we operate our buildings.
In addition to being a nationally recognized industry speaker on energy efficiency and sustainability, you are a presenter for two modules in the new Sustain Smart Seriessm program, including the Empowering Your Sustainable Team module in Series 1 and the Energy Management: The Road to Higher Efficiency Operations module in Series 2. Can you briefly touch on why professionals will benefit from participating in the Sustain Smart Seriessm program overall, as well as discuss the key notes they will take away from your specific modules?
BOMI International is using proven case study practices to assist and guide real estate professionals in gaining the additional insight and education necessary in their roles. Exposure to and the time needed to gain experience sometimes doesn’t always come in a convenient little package and/or instructional guide. The Sustain Smart Seriessm provides proven strategies and practices used routinely by many real estate leaders on successful projects throughout our industry.
Participants will walk away with several key “tips and practices” that will aid in the development of their own energy management and sustainability program.
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Take your career to the next level.
BOMI International certificate programs are ideal for professionals who are new to the commercial real estate industry, or those in the industry looking to upgrade their skills. Whether you enroll to accelerate your career, or to establish a foundation for a future designation program, earning a certificate will help you gain recognition, meet personal goals, and conquer professional milestones.
BOMI International offers four certificate programs:
- Property Administrator Certificate (PAC): Provides essential information needed to manage the ongoing operation and maintenance of building systems. Program features applications and scenarios that can be used to create building and facility budgets and to maximize building efficiency and cost-effectiveness.
- Facilities Management Certificate (FMC): Provides an overview of information that is important to manage a facility effectively in order to achieve maximum building efficiency and to minimize operating costs.
- Building Systems Maintenance Certificate (SMC): Provides in-depth information on key building principles, including efficient energy management and water treatment. Also provides a clear understanding of HVAC, plumbing, and other building systems that work together to provide a comfortable indoor environment.
- Property Management Financial Proficiency Certificate (PMFP): Provides the essential foundation needed to successfully manage assets and investment strategies, interpret financial statements, construct property/facility budgets, and improve overall operational efficiencies.
Review our 2012 education offerings.
BOMI International provides options for you to study in a way that is most convenient for you. Check out some of the options below, or click here to view our comprehensive course schedule, which includes all of our course offerings for 2012 via all delivery methods.
This method is highly recommended for business professionals needing the flexibility to learn conveniently when and where they want. Courses are accessible 24/7, including mobile connectivity. Online courses allow for daily interaction with expert instructors and the sharing of professional knowledge and experiences with peers on a national level.
The next set of Instructor-led Online courses begin January 24, 2012.
Register before December 24 and save $100!
This learning method fits into any lifestyle, allowing students to study independently and at their own pace. You may register for any course as self-study at any time since it is a self-paced approach.
This quick 3- to 4-day approach is available at several sites around the country and allows face-to-face interaction with expert instructors and peers. Accelerated review is a great way to learn quickly and meet local industry peers to build your professional network.
Successfully develop and properly implement a plan for sustainability.
Developed by BOMI International and Building Operating Management Magazine, the Sustain Smart Seriessm is a new two-part online education program designed for property and facilities management professionals who seek increased levels of knowledge in sustainability. Participants in the Series will learn to benchmark their facilities' current environmental footprint, develop a plan to reduce that impact, and articulate that plan to stakeholders. They will also gain tools to help them make informed decisions about sustainability while positively impacting bottom-line results. The program includes:
Series 1: Creating a Baseline and Plan for Sustainable Initiatives
Next offering begins February 20, 2012
Series 2: Best Practices for Sustainable Implementation
Next offering begins April 23, 2012
Each Series provides its own benefits, is independent of one another, and requires no prerequisites. Therefore, the Series may be taken in any order.
Register for both Series at once and save $500!
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UPDATES AND MORE
Mid-Atlantic Buildings & Facilities Management Show & Conference 2011
November 2 - 3, 2011: Garden State Expo and Convention Center, New Jersey
Booth #516 (BOMA New Jersey booth)
The ease in becoming a dual designee.
If you currently hold a Real Property Administrator (RPA®) designation, a Facilities Management Administrator (FMA®) designation, or a Systems Maintenance Technician (SMT®) designation, you can earn a second designation by completing just two or three additional courses! Becoming a dual designee will increase your knowledge and skills, and further enhance your professional value.
Current RPA Designation Holders
The RPA designation program and the FMA designation program share five of the same required courses. Therefore, by completing two additional required courses and one elective course* you can earn your FMA designation in addition to your RPA designation. Below are the required FMA courses, excluding the five shared courses, as well as the elective course options.
- Technologies for Facilities Management
- Facilities Planning and Project Management
Elective Courses (choose one)
- Asset Management
- Fundamentals of Facilities Management
- Managing the Organization
*If you chose to take Asset Management or Managing the Organization as your RPA designation elective, you have already completed the elective course requirement for the FMA designation. If you did not choose either of these courses as your elective, you must select one of the three electives above.
Current FMA Designation Holders
The FMA designation program and the RPA designation program share five of the same required courses. Therefore, by meeting the experience requirement, completing two additional required courses, and one elective course* you can earn your RPA designation in addition to your FMA designation. Below is information on the experience requirement, the required RPA courses, excluding the five shared courses, as well as the elective course options.
Before you can be awarded your RPA designation, you are required to demonstrate three years of verifiable property management experience. This experience must be performed for a portfolio or building 40,000 square feet or larger. Students pursuing their RPA designation are required to complete 18 of the 33 criteria. Click here to download the RPA Experience Requirement Form.
- Law & Risk Management
- Budgeting and Accounting
Elective Courses (choose one)
- Asset Management
- Fundamentals of Real Property Management
- Leasing and Marketing for Property Managers
- Managing the Organization
*If you chose to take Asset Management or Managing the Organization as your FMA designation elective, you have already completed the elective course requirement for the RPA designation. If you did not choose either of these courses as your elective, you must select one of the four electives above.
Current SMT Designation Holders
The SMT designation program and the Systems Maintenance Administrator (SMA®) designation program share five of the same required courses. Therefore, by meeting the experience requirement, and completing three additional courses, you can earn your SMA designation in addition to your SMT designation. Below is information on the experience requirement, as well as a listing of the required SMA courses, excluding the five shared courses.
As of January 1, 2011, students enrolling in the SMA designation program are required to demonstrate three years of verifiable experience as a stationary engineer or equivalent. This experience must be performed for a minimum property portfolio of 40,000 square feet. Students pursuing their SMA designation will be required to complete at least 25 of the 35 criteria. Click here to download the SMA Experience Requirement Form.
- Building Design and Maintenance
- Environmental Health and Safety Issues
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