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News Release

Sacramento Business Journal - November 24, 2006

Technology worlds collide in newest smart, green buildings

Today's advances converge utilities into building management systems –On the ramp in a parking garage, an electronic system detects your approaching car, and high-efficiency lights automatically turn on to light your path.

Henry Grek

“Each system is only as good as what you do with the system.” Henry Grek


At the office, rooms are equipped with occupancy sensors so the heating and cooling system shuts off in rooms that remain empty. Lights dim or brighten based on the amount of sunlight.
At the mall, you lose track of your 3-year-old and have no idea where she is. No problem. She's wearing a tracking device you picked up from the mall concierge, and security officers are able to pinpoint her location on a computer screen. If she tries to exit before you reach her, the doors automatically lock.

Wide-ranging technology is available these days to make buildings smart -- from retina scanners for security to Web-based digital controls for monitoring the heating and cooling. The possibilities are endless. But when and how much does extra intelligence pay off?

For developers and owners of residential, commercial or industrial projects, it's a vexing question, particularly with so many rapidly changing options.
"Technology is not only about the Internet," said New York-based consultant Herb Hauser, president of Midtown Technologies LLC, which advises developers on projects all over the country about technology deployment as a real estate asset.

Hauser calls it the "fourth utility," providing valuable information to coordinate and increase the efficiency of the other three utilities -- electricity, water and air heating and cooling.

Today the trend is toward convergence of information technology and the building management systems, such as heating and cooling, security, lighting and fire safety. Wiring systems for all the different technologies form a sort of central fiber spinal column. Information is sent constantly to a central "brain" alerting the system of any changes, such as an unauthorized entry or a sudden temperature increase in part of the building. Digital controls give facility managers the ability to make quick, precise changes, and Web-based systems allow them to do it from anywhere where they have access to a computer and the Internet.

Some big corporations monitor all their buildings from one central location that might be in a different state, said Henry Grek, vice president of engineering of Indoor Environmental Services in Sacramento, which designs and installs building systems, including HVAC. His company also provides monitoring services. Big operations, such as large office complexes, hospitals and colleges, have qualified people who work full-time using the technology to manage the building operations. The precise control of a big complex can save hundreds of thousands of dollars, said Grek, a professional engineer and certified energy manager.

But smaller and midsize users often don't have people on staff with the technical capability to do the monitoring and optimization of the ever-changing building operation and environment.
"The system has so many gadgets and possibilities," Grek said. "We step in and act as the monitoring department. Each system is only as good as what you do with the system."

Doesn't always pencil out
Smart is not just gee-whiz technology. It's about energy-efficiency, from lighting that automatically adjusts to occupancy and available sunlight to advanced heating and cooling systems that use far less energy than conventional systems.

Grek said new gadgets for building systems come out all the time, and it's a matter of sorting through the options to determine what the real payback is for his firm's customers. At a recent trade show, he said, he found half a dozen ideas out of more than 100 that appeared promising from a cost-payback and market implementation standpoint.

Even with a relatively short payback period of a few years, though, developers aren't always willing to pony up the extra money those systems cost.

"Building any building is expensive, and building a green or smart building is even more so, and often times dramatically so," said commercial broker John Frisch, managing partner of Cornish & Carey Commercial/ONCOR International. "As a developer, if you're building on spec, you have to be careful on how much you spend. Tenants don't always appreciate all these expensive items. There's a certain level a tenant is comfortable paying."
Commercial tenants in the Sacramento market are most concerned with rent, image, space configuration and location, Frisch said. "Energy efficiency and green technology are way down the list."

How much developers are willing to spend upfront on building systems technology, such as heating ventilation and cooling depends on the class of building, too. A developer of an upper-end Class A building is going to be willing to spend extra money, versus the developer of a basic, two-story building, said Brian Provencal, president of Turley & Associates Mechanical Engineering Group Inc. in Sacramento

Owners and occupiers are a different story. "When an owner/user is making a real long-term investment, they will elect to go with a green building because over time the investment will pay for itself,” Frisch said.
Now that's a garage-door opener

Frisch points to DPR Construction, who’s South Natomas office building shared with ABD Insurance is one of the smartest, greenest buildings in Sacramento. It is the first privately owned building in the valley to receive Leadership in Energy and Environmental Design certification by the U.S. Green Building Council.

Not all owners can afford to go the extent of qualifying for LEED certification. The key is to get the most energy efficiency and still meet the budget.
"It's easy to design a very high-tech building, but that doesn't help if you can't afford to build it," Provencal said.

When he advises developers, Hauser first invites them to brainstorm the technology possibilities, and then do the financial modeling to make a realistic plan.

"Will technology guarantee you have a home run? No," Hauser said. "A big mistake is developers go overboard thinking that's what people want."
The other mistake is doing too little or not going far enough with technology to make it worthwhile, he said. For instance, at the North Hills-Ritz Carlton condominiums in New York, a network-based security system recognizes residents' cars and automatically raises the gate for them to enter. The system also logs the car in and signals the valet and doorman so they're ready, and automatically turns on the living room lights, music, or whatever else the resident wants on in the home upon arrival.

Hauser, who was a consultant on the project, said if the only benefit was the gate opening by itself, the technology would not have penciled out financially. "It would have been too little benefit for too little of a headache." But the additional automated features, he said, made the technology a strong selling point to luxury buyers.

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