A decision support tool for building leasing strategies to achieve the executive order mandate for federal government green buildings

U.S. energy prices have risen by 51% over the last two decades. Buildings account for 39% of the total energy consumption in the United States. The Federal Government is a significant user of commercial buildings and can save money, improve the environment, and stimulate the green technology sector by migrating to sustainable facilities. The 2009 Executive Order 13514, Federal Leadership in Environmental, Energy, and Economic Performance, set a goal for all federal agencies to make 15% of their buildings High Performance Sustainable Buildings (HPSB) by 2015. The Federal Aviation Administration (FAA), which operates over 700 buildings, must convert 15 of its 126 directly leased buildings into HPSB within its existing budget resources. The FAA is currently leasing its building on rent cost per square foot and not Life Cycle Costs (LCCs). This is comparable to buying a car solely based on the sticker price to cargo capacity ratio. There are many more costs to consider over the length of ownership of a car, such as fuel economy, passenger capacity, and maintenance costs. One way for the FAA to meet the target in the existing budget is to incorporate LCC practices in the lease acquisition process. This way buildings are evaluated based on operational costs incurred over the entire lease term to yield net savings. To evaluate potential savings, an LCC Lease Analysis (LCCLA) decision support tool has been developed to assess leasing options factoring energy and water cost fluctuations for specific buildings in the FAA database. The tool includes three leasing strategies: (1) renewing the existing lease-this option will not help the FAA achieve the E.O.13514; (2) renovating the buildings to meet HPSB standards-the FAA may incur a higher rent, but will be able to satisfy E.0.13514; and (3) relocating the employees to a building that already satisfies E.O.13514. To generate accurate LCCLA results, surrogate data was used to analyze relationships between number of employees p- r building, cost per square foot, climate zones, and energy costs with respect to lease term, inflation, and energy costs projections. The analysis has identified fifteen buildings showing either a positive savings, net zero financial impact, or lowest costs. All but one of these buildings is less than 25000 square feet. This is a result of the lower cost of renovating smaller buildings. The analysis also reveals that full service leases do not allow the FAA to reap the benefits of the green technology. Since the responsibility of paying utilities falls to the lessor, the lessor is in a position to charge a premium rent to cover the stochastic energy costs. If those costs are actually less than what was negotiated, the lessor can pocket the difference. Partial service leases give finer control over money for utility bills. This method of leasing also has the capability of giving immediate feedback as to the performance of the efficiency of the building.