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Smart Investments, Proven Results: A Case Study

By Allison Porter, Vice President, Sustainability Services

Portrait Building

One of the most common requests Cushman & Wakefield’s Sustainability Services team receives is to help our clients make smart investments in their buildings. The list of possible building upgrades is nearly endless, but which ones offer real value, especially in terms of financial return?

The Portrait Building in Washington, DC, is an excellent example of this type of smart investment. In fact, the Institute for Market Transformation (IMT), a Washington, DC-based nonprofit organization promoting energy efficiency, green building and environmental protection, recently published a case study on the Portrait Building as a model for others to follow.

“How can energy upgrades enable forward-thinking building managers to provide considerable value to both owners and tenants? This case study examines recent energy improvements to The Portrait Building in downtown Washington, DC, as a real-world example of the potential gains. Three efficiency measures, completed for a total of $169,946 (or $1.27 per square foot) will pay back in a little over two years and, over an assumed 10-year useful life, offer a cumulative net present value of $578,248 and a 49 percent internal rate of return. Their total return on investment (ROI) is estimated to be 440 percent, equivalent to a 44 percent annual ROI. With projected annual cost savings of $75,252, this project shows how modest investments in energy efficiency can have large impacts on a property’s bottom line while benefitting tenants and the environment.”

-Institute for Market Transformation

Shortly after Cushman & Wakefield took over management of the Portrait Building in 2013, the owner engaged our Sustainability Services team to guide the property through the LEED for Existing Buildings (LEED-EB) certification process. It earned Gold certification in early 2014. As part of the LEED process, the building underwent an energy audit to identify energy savings opportunities.

The property team incorporated these recommendations into its operating plans and capital budgets. With incentives from the DC Sustainable Energy Utility, the building completed retrofits to its garage lighting, interior lighting and motors in 2014. As a result, the building’s energy performance soared, from an ENERGY STAR® score of 75 in 2013 to 92 in 2015. The annual energy cost savings of approximately $75,000 will pay back the project cost of $170,000 in just over two years.

The Portrait Building’s experience demonstrates how the LEED-EB certification process continues to contribute to a building’s value long after the plaque is hung – and that making the right energy-efficiency investments can deliver major financial benefits.

allison porterAllison joined Cushman & Wakefield in August 2014 and is based in Washington, DC. She focuses on business development and service delivery of the firm’s growing national Sustainability Services practice, as well as integrating sustainability and energy efficiency best practices into Cushman & Wakefield’s daily operations.

 

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