1225 North Loop Investments, Inc. utilized the City of Houston’s PACE program to invest $1.3M in property upgrades, making 1225 North Loop West the first commercial office building to implement a TX-PACE project.
THE PROBLEM:
The 1984 commercial office high-rise had 35-year-old chillers, an antiquated control system, and inefficient lighting. The chiller replacement parts were costly and difficult to find and the ongoing reliability issues of the aging equipment were haunting for staff and ownership. Management explored replacement options but hesitated at the substantial upfront capital outlay.
According to the US Energy Information Administration, the average office building spends $1.51 per square foot on energy costs. Just slightly above the nationwide average, the property’s management initiated a preliminary energy analysis and concluded that upgrading the aging equipment using operational savings created a realistic opportunity.
THE PACE SOLUTION:
John Myers, President of Peloton Commercial Real Estate, introduced the TX-PACE concept to the former General Manager, Alessandro Clerici, at 1225 North Loop Investments. As a Keeping PACE in Texas member who helped create the PACE in a Box toolkit, Myers suggested utilizing TX-PACE to redirect current utility expenses and eliminate the need for diverting core capital. The savings report indicated that the priority mechanical equipment would qualify for the program if it was paired with the inclusion of LED lighting throughout the entire facility. By grouping together efficiency measures with short and long-term paybacks, the projected energy savings would exceed the cost of the project over the 20-year term. The project includes two new chillers, variable speed drives, air handlers, interior and exterior LED lighting, and building controls. The project will reduce utility consumption by 38% and provide $3.66 million in savings over the 20-year term. The lasting benefits of steadier budgets, more comfortable work environments, and diminished equipment emergencies will positively impact both ownership and tenants. Property Manager Seth Eslami explains, “Our priority was the mechanical equipment upgrade. The efficiency component was just an added benefit. I am hopeful that
this project will help more people see that TX-PACE is not a typical ‘green’ program focused solely on saving the environment, but instead has a focus on improving the financial side of a business. TX-PACE can upgrade a building and can pay for itself.”
COMMUNITY IMPACT:
“Houston is the energy capital of the world and has a responsibility to lead by example and use our energy resources as efficiently as possible,” said Houston Mayor Sylvester Turner.
source: https://www.texaspaceauthority.org/