Exhibit- J- BUVC for Commercial Real Estate_July2016.xls

Welcome

EPA's Building Upgrade Value Calculator (BUVC) allows commercial real estate owners and managers to analyze the financial value of capital investments in energy efficiency upgrades at their buildings. This tool calculates the financial impacts of the proposed improvements from two perspectives: (1) the financial benefits to ownership from owner-financed improvements; and (2) the financial benefits to each individual tenant, accounting for expense reimbursement approaches under most common office and industrial lease structures. In exploring the financial impacts (both costs and benefits) of having tenants help fund efficiency projects, this tool can be used to drive conversations between landlords and tenants that move beyond the “split incentive” typically assumed to exist in commercial lease arrangements.

As an upgrade to the original BUVC, which calculated financial results at the whole-building level, Version 2.0 of the BUVC also allows users to explore the financial impacts of having tenants help fund capital investments (in scenarios where the owner can recover certain expenses from tenants). The tool's results are presented in two ways: printable reports (for the owner and for each selected tenant, if applicable) that summarize the financial results and qualitative benefits; and letters (in Microsoft Word format) that you can customize and use to make a compelling business case to fund the investment - and/or to help a property manager engage in productive conversation with tenants..

At this time, the BUVC is set up to compute the impact on tenant expense reimbursements for the most common office and industrial lease structures. Retail leases are not covered by this tool, but may be covered in a future version.

Questions and comments about this calculator should be directed to the ENERGY STAR Help portal at http://www.energystar.gov/buildingshelp.

Release date: July 26, 2016

Get Started!

Definitions Instructions

Instructions

Click “Get Started” at the upper right corner of this screen.

On the "Property and Project Inputs” page, fill in all light blue cells with required information.

In the “Energy Project Information” section, you do not need to fill in all rows (the tool can accommodate up to 10 efficiency projects at a time, but it is fine to enter fewer than 10); however, you cannot leave rows partially complete. If you enter any information in a row, all cells in that row must be completed.

Click “Use Sample Data” at the top right corner of the screen to auto-populate the page with sample building inputs if you would like to see how the tool works without needing to gather the required information just yet.

Click “Clear” at the bottom right corner of the page to clear all inputs at any time.

Step 2: Select Analysis Type

A “Whole Building” analysis assumes the owner is paying for 100% of the upgrades, and no tenant information is required. A “By Tenant” analysis requires tenant inputs, and will account for any recovery of expenses anticipated from tenants.

Click the button corresponding to the type of analysis you would like to perform.

Step 2(a): Enter Expense and Tenant Information (if “By Tenant” analysis type was selected)

If you selected a “By Tenant” analysis, enter all required information in the light blue cells on the Tenant Inputs page. The expense pool calculations are hidden by default, but if you would like to see expense pool calculation details, click the “Show/Hide Expense Pool Calculations” button.

When filling out the Tenant Level Information table, be sure to select a Leasing Structure before filling in any inputs to the right of that column. Certain inputs are not required for some lease types, and selecting the Leasing Structure first will grey out any cells that do not require inputs. Do not enter anything into those cells.

Be sure not to accidentally type anything below the line for the last tenant in the table. If you are worried you may have done this, temporarily enter 150 in the “Number of Tenants” field to view an expanded version of the table. Delete any stray inputs, then restore the “Number of Tenants” field to the correct value.

The “Operating Expense Cap Information” section is not required, but should be filled in if applicable. All other fields in light blue are required for each tenant.

Click “Use Sample Data” at the top right corner of the screen to auto-populate the page with sample tenant/expense inputs if you would like to see how the tool works without needing to gather the required information just yet.

If you would like to go back and review your Property and Project inputs before continuing, click "Return to Property and Project Inputs." Otherwise, move on to Step 3.

Step 3: Calculate Results

If you are on the Tenant Inputs page, review the text below the "Calculate Results" button. If it instructs you to complete any missing information, please do so (it may be necessary to return to the Property and Project Inputs tab to ensure all information has been entered). Once all information is complete and you are ready for your results, click the “Calculate Results" button at the top right of the page.

If you are on the Property and Project Inputs page, review the text above the “Calculate” button. If it instructs you to do so, click “Calculate” to perform the analysis and get your results. If the text above the “Calculate” button instructs you to select an analysis type or to complete any missing information, please do so. Once all required inputs have been provided and an analysis type has been chosen, the text will change and will instruct you to click “Calculate.”

Step 4: Review Owner Results

The Owner Results tab shows all whole-building outputs that may be relevant to the owner or manager of the building. These outputs include some general metrics, such as Investment Net of Rebates, Payback Period, and Return on Investment, as well as an energy project summary and an annual savings summary. If financing details were entered in the Property and Project Inputs page, financing and payment information will also be generated.

If you return to either of the input tabs and change any information without clicking “Calculate” again, some of the information on the Owner Results tab may not update. A warning message will appear at the top of the page if this occurs. Be sure to click “Calculate” again after each update to inputs to ensure all output values are accurate.

If desired, you can generate a letter intended for the building owner/management by clicking “Generate Letter.” This letter will open in Microsoft Word, and can be customized to meet your individual needs. It will auto-populate with key financial metrics from the analysis performed, and will also list some potential qualitative benefits of the upgrades to help make the case for pursuing them.

Step 4(a): Review Tenant Results (if “By Tenant” analysis type was selected)

To access tenant-specific outputs (if you performed a “By Tenant” analysis), click "Proceed to Tenant Results" on the Owner Results tab. This will direct you to the Tenant Results Selection page.

On the Tenant Results Selection page, you can select the tenants for whom you would like to generate results summaries (only available for Modified Gross and Triple Net tenants) and letters. Use the Yes/No dropdowns in the last two columns to make these selections.

A financial summary may be generated for each tenant (except those will Full Service Gross leases) by selecting "Yes" or "No" in the "Generate Results Summary?" column, then by clicking "Generate Tenant Results Summaries." These summaries will appear on new tabs (one tab for each tenant), and will show some basic tenant information along with projected contribution and savings values over the course of the analysis term. Please note that these tabs will not update dynamically if inputs are changed -- if any inputs are changed, please click "Generate Tenant Results Summaries" again to ensure the tenant output tabs are updated.

Letters may also be generated for each tenant. The letters will describe the proposed upgrades and their financial and qualitative benefits to the tenant, and can be used to help the tenant understand the impact of their contribution to the cost of the upgrades, as allowed by lease. Please note that you will need to provide contact information in the Tenant Results Selection table for any tenants for whom you would like to generate letters. To see what the letters look like without providing contact information, click “Use Sample Contact Info” at the top right of the page.

At any point in the process, users can:

• Check the definition of a term used in the tool by accessing the "Definitions" tab or by clicking "Definitions" at the upper right corner of another tab.

• Start over by clicking "Start Over" on either the Owner Results tab or Tenant Results Selection tab.

• Return to the Instructions by clicking "Instructions" at the top right corner of any page.

Get Started!

Definitions

Definitions

Additional Annual Savings for Labor and Supplies – The annual savings expected from reduced labor, supplies, equipment and maintenance as a result of the energy efficiency measures (i.e., all savings other than to utility costs). For example, additional savings may be derived from the reduced labor for troubleshooting after an energy management system is installed.

Analysis Term – The analysis period, in years, used to calculate the financing terms and annual savings to Owner and, if applicable, the annual savings to and contributions from tenants. The calculator defaults to 10 years, which assumes your investment has a long benefit stream.

Annual Utility Savings – The anticipated annual utility savings expected from the reduced energy consumption associated with each energy efficiency measure. This value may also take into account any projected annual reduction in demand charges.

Base Year Annual Rent – The annual rent in the base/first year of the tenant's lease.

Building Size (sq. ft.) – The total area of the property's interior floor space, whether occupied or unoccupied. Include all storage areas, stairwells, elevator shaft floors, etc., in your calculation.

CAM – An industry standard acronym for “Common Area Maintenance,” which is often used interchangeably with the term “Operating Expenses." It is typically used when discussing operating expenses for which a tenant reimburses Owner.

Capitalization Rate – The anticipated rate of return on an investment. The capitalization rate is set by the market and fluctuates based on market dynamics. Mathematically, the capitalization rate equals the net operating income for a property divided by its asset price or sales value, expressed as a percentage. The calculator defaults to 6%, but the user can enter any value greater than 0. Sometimes referred to as the "cap rate".

Change in Total Tenant Reimbursements -- The net change in expense reimbursement revenue that Owner can reasonably anticipate from in-place tenants due to the the impact of the following on a tenant's expense pool: (1) inclusion in operating expenses of amortization of the Project Costs (based on the amortization methods selected on a tenant by tenant basis on the "Tenant Inputs" sheet); and (2) decrease in operating expenses from the Total Annual Savings. All calculations are determined based on inputs provided on the "Property and Project Info Inputs" sheet and "Tenant Inputs" sheet, and rely upon the reasonable accuracy of such inputs matching the terms of the leases and Owner's existing accounting methods. If the Analysis Term exceeds any individual tenant's lease end date, then the Change in Total Tenant Reimbursements from such tenant for the period of time beyond the lease end date will be $0, as this model does not include any future leasing assumptions.

Controllable Expenses – For leases that restrict or cap increases in certain operating expenses that a tenant reimburses to landlord, the expenses subject to such cap are defined as “Controllable Expenses”. The definition of “Controllable Expenses” may vary from lease to lease, but is commonly defined as all operating expenses other than utilities, real estate taxes, and insurance. The tenant reimbursement calculations in this model reflect this basic definition.

Discount Rate – Percentage rate that captures the user’s “opportunity cost” or alternative return on investment. It is used to calculate the current value of a stream of future payments – i.e., energy savings. The calculator defaults to 8%, but the user can enter any value greater than 0.

Energy Efficiency Measure – The name (enter up to ten names) for the energy efficiency measure(s) to be evaluated. The measures are collectively referred to as the "energy project" on the Owner Results and Tenant Results tabs.

Energy Efficiency Measure Cost – The anticipated cost of the energy efficiency measure, including (but not limited to) design, planning, commissioning costs, labor, and equipment, which may be derived from bids from contractors or vendors. This should also include any project/construction management fees.

Expense Pool – A particular grouping of property operating expenses that have been adjusted for certain factors such as the inclusion/exclusion of taxes or electricity, or for a certain gross-up factor, and which serve as the basis for a tenant’s expense reimbursements. The selection of an expense pool for a particular tenant is determined by the language in a tenant’s lease and, in this model, is based on the tenant level information entered on the Tenant Inputs page. The BUVC model only calculates the more common expense pools (Expense Pools A-H, which can be viewed with the “Show/Hide Expense Pool Calculations” button on the Tenant Inputs page), as modeling all possible expense pools in existence is beyond the scope of this tool.

Full Service Gross Lease – A lease requiring the landlord to provide and pay for all maintenance, upkeep, repairs, janitorial services, waste removal, utilities, insurance, taxes, and other operating expenses for a property in return for a fixed periodic rent from the tenant. Under this lease structure, increases in operating expenses are borne by the landlord, and thus reductions in operating expenses benefit the landlord in the form of higher net operating income.

Gross Up % – A percentage, based on a provision included in many leases, that adjusts those expenses that vary with the level of occupancy to reflect what they would be if the property was fully (100%) occupied or 95% occupied.

Interest Rate – An average percentage rate that a company would pay to raise money through loans or bonds. The Calculator defaults to 8%. If no value is entered, the calculator assumes that the investment is financed internally.

Investment Net of Rebates – The sum of the Project Costs minus any rebates or incentives received for the project(s).

Leased Square Footage – The square footage listed in a tenant's lease.

Loan period – The period, in years, used to calculate the costs associated with an externally financed investment.

Measure Lifetime / Amortization Period – The number of years over which a specific upgrade’s costs are split up, usually for billing back to tenants. For example, a $16,000 upgrade amortized over 4 years (with no interest) would be billed back to tenants at $4,000 per year.

Modified Gross Lease (Base Year or Expense Stop) – A type of lease where the tenant pays base rent at the lease's inception, but in subsequent years pays the base rent plus a proportionate share of some of the operating costs above those incurred in the base year (or above an expense stop). For example, under a modified gross lease, tenants might pay $30 per square foot per year in total rent in year one (and where that rent would cover $10 per square foot in operating expenses and $20 in base rent). In year two, if operating expenses increased to $12 per square foot the tenant would have to pay their prorata share of the $2 increase in operating expenses in addition to their $30 modified gross rent.

Net Investment Cost – Total Owner Payments plus the Change in Total Tenant Reimbursements (as defined on this page).

Number of Loan Payments per Year – The number of payments per year for the loan. The calculator defaults to 12 payments per year.

Operating Expense Cap – A value based on a provision included in some leases that restricts, or “caps,” annual increases in the operating expenses that a tenant reimburses. There are many subtle variations in how a lease may word this clause. However, the BUVC model is designed to cover the most common types of caps, which include a cap on total operating expenses, or (more commonly) a cap on Controllable Expenses (as defined on this page).

Payback Period – The estimated period (in years) computed as: Project Costs (Investment Net of Rebates) divided by Total Annual Savings. The Payback Period is typically something that is provided by contractors or vendors in their bids. For projects that are expected to be treated as an operating expense rather than a capital expenditure, the Payback Period should be entered as one (1) year.

Potential Impact on Year 1 Net Operating Income (NOI) – Computed on Owner’s Output sheet for Year 1 NOI only, and is equal to the sum of: (1) Total Annual Savings (as defined below) and (2) Change in Total Tenant Contributions (as defined above). This does not include the impact of Total Owner Payments, as those are typically treated as capital expenditures that would impact cash flow, but not operating income. Note that the impact on NOI beyond Year 1 is reflected in the BUVC assuming no changes in current leasing, occupancy or operating expenses. A more detailed analysis on the impact to NOI in future years will require Owner to factor in their own future leasing, occupancy and expense assumptions.

Potential Impact on Asset Value – computed on the Owner's Output sheet based on the direct capitalization method of valuation (i.e., Potential Impact on Year 1 NOI divided by the Capitalization Rate entered on the Property and Project Inputs sheet). A more detailed discounted net present value method of valuation will require Owner to factor in their own future leasing, occupancy and expense assumptions.

Project Costs – The sum of all Energy Efficiency Measure Costs.

Rebates – The sum of any applicable rebates or other financial incentives received from a local utility (or other entities, as appropriate) for the purchase or installation of the energy project(s).

Retrofit Impact Year – Year 1 of the Analysis Term; the first year in which savings resulting from upgrades are realized.

Return on investment (ROI) – The annual rate of interest earned on an investment. In the case of Energy Efficiency Measures, this equals Total Annual Savings divided by Investment Net of Rebates, expressed as a percentage. Note: the ROI computed by the BUVC is for the Project level and not the Owner level, and thus does not factor in the Change in Total Tenant Reimbursements. An Owner level calculation of ROI would require more in-depth assumptions on future occupancy, leasing, inflation, etc., which is beyond the scope of this tool.

Simple Payback Period (SPP) – The time required (in years) to recover the cost of a capital investment. In the case of Energy Efficiency Measures, SPP is calculated by dividing the Investment Net of Rebates by the Total Annual Savings. Generally, the shorter the payback period, the faster the return on the investment. This calculation does not factor in the Change in Total Tenant Reimbursements.

Total Annual Savings – Equal to "Annual Utility Savings" plus "Additional Annual Savings for Labor and Supplies".

Total Annual Utility Bill – Total annual expenditures for electricity, natural gas, chilled water, and steam (as applicable) for the Property.

Total Owner Payments – The sum of all payments made by the Owner to cover the Project Costs. If Owner finances the Energy Efficiency Measures, then the Total Owner Payments will exceed the Investment Net of Rebates.

Triple Net Lease – A lease where the tenant's base rent is net of (i.e., does not include) three major expense categories: (1) operating expenses, or "CAM" (Common Area Maintenance); (2) insurance; and (3) real estate taxes. The tenant reimburses the Owner for these three expense categories, separate from base rent.

Useful Life – The duration (in years) for which the Energy Efficiency Measure will be useful to the Property, as typically determined and provided by the contractors/vendors. Useful Life does not necessarily equate to how long the Energy Efficiency Measure equipment will actually last (e.g., Useful Life may be shorter than "equipment life" or "physical life").

Utility Fixed (%) and Utility Variable (%) – Utility Variable (%) is the percentage of a property’s utility expenses which are considered to vary with the level of occupancy of the property, and are normally considered to be those which are incurred with respect to leasable space at the property. In contrast, the Utility Fixed (%) is the percentage of a property’s utility expenses which are considered to remain static regardless of a property’s occupancy level, and are normally considered to be the utilities incurred with respect to the property common areas and mechanical systems serving the property as a whole. The fixed/variable split is usually determined by the building engineer(s) or utility consultant(s). While the fixed/variable split may be different for different utilities, the BUVC model simplifies the calculations by assuming the same fixed/variable split for all utilities. A user is encouraged to enter the fixed and variable % for their property based on the largest utility expense category, which is typically electricity. The BUVC model also assumes that all utility savings from Energy Efficiency Measures go to reduce fixed utilities, as the large majority of such projects are applied to base building systems and common areas which impact all tenants, regardless of whether they are separately metered for premise electricity or not.

Get Started!

Instructions

Property and Project Inputs

sum: 0

# Rebates: 0

US EPA ENERGY STAR Valuator Tool Version 1.0 &D

Definitions Use Sample Data Calculate Clear Whole Building By Tenant Instructions Please enter required information in light blue cells.

http://energystar.gov/index.cfm?c=business.bus_indexhttp://www.energystar.gov/buildingshelp Tenant Inputs

Expense Entry and Utility Gross Up Calculations

Projected Expenses Without Energy Efficiency Measures (Year 1) Projected Expenses With Energy Efficiency Measures (Year 1)