The Project at a GlanceDownload
In 2015, Rocky Mountain Institute (RMI), an international nonprofit organization, had outgrown its office space and wanted to lease space in a hyper-energy-efficient and sustainable net-zero-energy (NZE) office building. As a result, RMI ended up as the anchor tenant in Boulder Commons, an all-electric, aspiring NZE property in Boulder, Colorado. At the time of its completion, Boulder Commons was the largest leased multi-tenant aspiring NZE mixed-use commercial project in the United States. The NZE process for this project was cost-effective for both the developer and the tenants, and it can serve as a model for the next level of high-performing, sustainable tenant spaces.
RMI and its landlord, Morgan Creek Ventures, had collaborated on a tenant improvement project to achieve a Leadership in Energy and Environmental Design (LEED) Platinum rating for RMI’s previous office space. However, with its new space, RMI wanted to push the envelope even further and truly embody its mission by moving into an NZE space, the gold standard for efficiency. There was one catch: not a single NZE office building existed in the city of Boulder for RMI to rent. Even though Boulder is known for its high efficiency building standards and even though the city requires that all buildings be at least 30 percent more efficient than ASHRAE 90.1-2010, in 2015, none of the existing buildings met RMI’s ambitious goal of NZE.
However, RMI’s landlord, Morgan Creek Ventures, was up to the challenge of developing a multi-tenant NZE office building, and RMI quickly came on board as the anchor tenant. As one of the first and one of the largest multi-tenant NZE buildings in the United States, Boulder Commons stands out as an example of what is possible in multi-tenant NZE construction and in landlord/tenant collaboration. And as the anchor tenant of Boulder Commons, RMI saw the value in collaborating with Morgan Creek Ventures to build out an efficient and sustainable tenant space that would demonstrate that advancing energy efficiency and renewable energy in leased offices is possible and replicable for any tenant.
When Morgan Creek Ventures set out to design the base lease for the NZE building, it approached RMI for its assistance in codesigning the accompanying green lease that would eventually serve 10 to 15 other tenants in the two Boulder Commons buildings. RMI not only became the anchor tenant of Boulder Commons, but also became the first tenant to execute the green lease. The unique green lease gives tenants an energy budget allocation to manage plug-load usage, offers options in the form of purchasing renewable energy credits (RECs)3 in case a tenant uses more energy than is allocated, and requires annual recommissioning of equipment to maximize operating efficiency.
The tenant space itself incorporates sustainable design elements, such as triple-pane fiberglass windows; LED lighting and controls; a highly efficient heating, ventilation, and air conditioning (HVAC) system with variable refrigerant flow and energy recovery; and an advanced building envelope design with continuous exterior mineral wool insulation, a low air-infiltration rate, and solar panels covering the entire roof and east facade. Those features provide many benefits, such as increased tenant comfort and added value in the form of energy savings. The LED lighting alone is 50 percent more efficient than code baseline lighting.
Although the construction-to-NZE standards came at a 12 percent premium, the entire Boulder Commons project saves an estimated $146,000 in energy costs every year, which will translate to long-term energy savings throughout the life of the property for both the owner and the tenants. RMI has the added confidence of knowing that its energy bills will remain the same every month—instead of fluctuating unexpectedly—because a lease clause outlines an energy budget and a stable monthly utility charge. After energy modeling and design, RMI’s tenant space end-energy use was estimated to be 36 percent more efficient than the baseline ASHRAE 90.1-2010 code. However, usage tends to be even lower than this modeled efficiency, as this case study outlines.
|Rocky Mountain Institute tenant space||Projected design|
|Lease term||5 years|
|Square footages||14,302 square feet*|
|Modeled energy reduction**||36.5%|
|Energy savings compared with RMI's old space||21 kBtu/square foot/year***|
|Return on investment without incentives||6-9%****|
|Payback period (without incentives)*****||10-15 year payback period|
**As this was a new building, this data point is based on Boulder code.
***Note that 21 kBtu/square foot/year is kBtu of entire building. RMI’s old building used 47 kBtu/square foot/year while Boulder
Commons uses 26 kBtu/square foot/year.
****Because of the expansion of RMI’s leased space, an extended lease (eight years) and potentially changing energy prices in
coming years, this percentage may fluctuate between 6 and 9 percent. However, even at the low end of 6 percent, this represents
an average real estate ROI.
*****Note that RMI represents about 20 percent of the entire Boulder Commons property. The payback period has been calculated
with this as a consideration.
Executing the Process
Pre-Leasing Phase: A Collaborative Effort
RMI committed to lease 14,302 square feet of office space11 before Morgan Creek completed construction, and continued to work with Morgan Creek Ventures and the tenant fit-out design and engineering team throughout the construction process. RMI selected the space not only because it was NZE, but also because it had an aligned vision with the landlord and the space was cost competitive with other Boulder properties and it was near mass transit. Even though RMI, Morgan Creek Ventures, and their legal counsel, Holland & Hart LLP, had never negotiated an NZE lease before, all of the parties were able to agree on energy-focused lease clauses through careful communication and understanding of the overall building and tenant space goals. At the end of this process, Morgan Creek Ventures decided to implement a modified gross lease. The NZE lease between RMI and Morgan Creek Ventures became the first lease for the project and it serves as the base lease for all other tenants in the building. RMI’s lease includes the following components:
- Retro-commissioning of the base building systems shall occur annually to ensure that they continue to operate at peak performance and cost effectively. Retro-commissioning is paid for through the “operating expenses” budget and the landlord passes a share of the costs through to the tenants.
- If tenants go over their allocated plug-load energy budget within their spaces, recommissioning will also be required of that specific space’s systems.
- If the building fails to meet the NZE level at the end of the year, Morgan Creek Ventures will purchase RECs to offset the difference. If the shortcoming is a direct result of tenant energy use and activity, the costs will be passed through to that tenant.
- Throughout the process of managing and measuring energy use, Morgan Creek Ventures shares information with tenants through monthly plug-load energy reports and through an annual energy consumption report.
Thanks in large part to RMI’s collaboration with Morgan Creek Ventures, when new tenants move into Boulder Commons, they will be able to negotiate their lease agreements from a greener, more efficient base lease structure.
|Energy performance measure (EPM)||Cost to implement||Savings potential||Target area|
|Efficient HVAC system: variable refrigerant flow||High||High||HVAC|
|Plug-load monitoring||Low||Medium||Plug loads|
|Triple-pane windows||High||Medium||Base building|
|Samsung Smart Things devices||Medium||Medium||Plug loads|
|Submetering of HVAC||Low||Medium||HVAC|
|Submetering of lighting||Low||Medium||Lighting|
|Continuous thermal envelope/AeroBarrier||High||Medium||Base building|
|Nighttime air flushing||Medium||Medium||Base building|
|Automated venting||Medium||High||Base building|
|Automated window blinds||Medium||Medium||Base building|
|Alternative wall construction methods||Low||Low||Base building|
|Fiberglass frames with triple-paned windows||Medium||High||Base building|
|Redirecting window film||Low||Low||Base building|
|Renewable energy: solar photovoltaic array||High||High||Renewable energy|
|Narrow floor plates||Low||Low||Base building|
|Lighting controls and sensors||Low||Medium||Lighting|
Design and Construction: Building to Net-Zero-Energy Standards
In keeping with the goal of NZE, Morgan Creek Ventures knew it would have to value engineer and make tradeoffs to stay on budget for the development of Boulder Commons. The project as a whole saw a premium of about 12 percent to be built to NZE, but financial paybacks and longevity of the asset made this premium a worthwhile investment. After energy modeling, Coburn Architecture worked with Morgan Creek Ventures and Integral Group to calculate the projected financial returns.
After vetting options and sustainability considerations, each item’s potential effect was analyzed on a per dollar basis—that is, the energy use intensity (EUI) impact was compared to the dollar amount. Some of the options that ultimately did not meet the EUI to-dollar parameters that were set out by the design team include geothermal systems, nighttime air flushing, automated venting, alternative wall construction methods, automated window blinds, fiberglass storefront windows, photoreactive glass, and other technologies. Although these are all well-functioning systems that may be advantageous to other NZE or energy-efficient buildings and tenant spaces, they did not meet the criteria for Boulder Commons. The following lists are the final tenant space parameters:
- LED lights: possible power density of 0.35 watts per square foot (61 percent better than required by Boulder energy code)
- Lighting controls: features continuous dimming daylighting controls throughout open office and vacancy sensors throughout open office and conference rooms
- Plug-load monitoring: data communicated between tenants and landlord to ensure that each space is operating within its allocated budget and to help the entire property stay at net-zero energy
- Submetering of all systems including HVAC and lighting using the e-Gauge platform
|Boulder Commons core and shell & RMI tenant space teams|
|Morgan Creek Ventures
Core & Shell Project manager
Architectural design consultant
Conceptual core and shell energy analysis
|Huntsman Architectural Group
Tenant fit-out architect
MEP (mechanical, electrical, and plumbing), lighting engineer
|Holland & Hart
RMI legal lease negotiation counsel
RMI continues to look not only for ways to reduce energy use and cost, but also for ways to reduce carbon impact associated with building operations. A big way to do that is by managing peak demand through load flexibility and on-site energy storage. This process would enable Boulder Commons to shift energy loads to periods when the sun is shining or the wind is blowing and there is a greater amount of clean, carbon-free energy fueling the building, either from the PV on the roof/facade or from the grid. Demand management and load flexibility will also enable cost savings by reducing demand charges, which currently make up over half of the building’s energy costs.
RMI and Morgan Creek Ventures designed the modified gross lease so that any cost savings from on-site storage installed by the landlord would flow back to the landlord, thereby avoiding the split incentive issue. Plus, as more wind and solar are put on the grid, Boulder Commons could act as a grid interactive building, shifting its load to help with grid stability, which would benefit all energy users. For Morgan Creek Ventures, NZE development did not stop with one NZE building—in fact it was just the beginning. The next phase of Boulder Commons will include an NZE multifamily residential building and an additional NZE commercial office building; both new developments will officially seek net-zero-energy certification.