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Mixed-use office building in Wilmington, North Carolina

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This historic mixed-use office building at 272 North Front Street in Wilmington, North Carolina, is an outstanding example of how continuous capital improvements and targeted retrofits can substantially improve energy efficiency and property performance.

Punctuated with the installation of a building management system in 2012 and a new central chiller in 2013, the property achieved a 21% reduction in annual energy costs in 2013, that generated $11,100 in annual energy savings to the owner. The retrofits yielded an unleveraged internal rate of return (IRR) of 29.6%, an annual return on investment (ROI) of 22%, and net present value (NPV) of $138,666. The improvement was so significant, that the building’s rated performance climbed from the market average to qualifying for ENERGY STAR certification.

The improvements also contributed to a more comfortable environment for tenants, which helps with tenant retention and net operating income, making the building a more valuable asset for its owners. The building’s increased performance can be reflected in numerous adjustments to its appraised value—possibly as much as a $217,504 increase as a result of a cap rate adjustment.

 

Building Information

Owner: Self-Help

Location: Wilmington, North Carolina

Building Type: Mixed-Use Retail and Office

Size: Five stories; 44,000 square feet

Year Built: 1906

 

Efficiency measures

Building Management System including starttop, status, override, other sensors for central chilled water plant, fan coil units (59 total) and elevator bay (2012)

New Chiller Plant, installed as part of capital improvement programme (2013)

 

Key results

Weather-normalised annual energy use decreased by 28%, achieving ENERGY STAR-level performance.

Reduced electricity, gas, and water use (21% energy cost savings, 13% water cost savings)

Unleveraged ROI of 22% assuming 20 year useful life and discounting the planned chiller replacement.

Immediate return on capital invested with income capitalisation of avoided energy cost alone; additional value adjustments possible.

Annual utility savings of $11,565.

 

For further information and details, you can download the relevant report elaborated by the Institute for Market Transformation (ICM) here.

Lessons learnt

Built in 1906, Self-Help’s downtown Wilmington property shows that an older building, likely designed without efficiency in mind, can improve its energy performance through retrofits while making the building more affordable for its retail, small business, and non-profit tenants. As a result of this successful project, Self-Help intends to replicate its success by continuing retrofit efforts at this building and elsewhere in the company’s portfolio.

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