Often Overtime Cooling and Supplemental Cooling costs are overlooked when executing a lease for a new office space. Differences in these costs can easily equate to millions of dollars over the 10-year lease term.
Need help assessing a commercial real-estate lease in regard to the MEP and HVAC systems? Contact Built Engineers & Architects for Due Diligence or Physical Conditions Assessments (PCA). Call 646.481.1861 or email info@builtengineers.com
What is Overtime Cooling?
Overtime cooling is cooling that is to be provided by the main building systems outside of the typical building cooling operating hours.
This is usually billed as a separate cost to the tenant for additional power requirements, building staff, and maintenance.
Overtime cooling costs at PROPERTY A = $275 per floor per hour
Overtime cooling costs at PROPERTY B = $151 per floor per hour
Big deal right? Only a different of $124 per floor per hour.
But what if you're looking to take (10) floors at the building?
Overtime cooling costs at PROPERTY A = 10 floors *$275 = $2750 per hour
Overtime cooling costs at PROPERTY B = 10 floors *$151 = $1510 per hour
$2750-$1510 = $1240 difference in overtime cooling costs per hour.
Still not a huge figure, but we have not yet considered how many hours of overtime cooling will be utilized:
***Assuming 8 hours per week of overtime cooling during cooling season. 8 hours * 20 weeks of cooling season = 160 hours per year.***
160 hours * $1240 difference = $198,400 approximate cost difference per year
PROPERTY A could be approximately $198,400 MORE per year for overtime cooling than PROPERTY B and approximately $1,998,400 MORE for overtime cooling during a 10-year lease term!
What is Supplemental Cooling?
Supplemental cooling is typically provided to tenants from a building-maintained cooling tower assembly.
The tenant is provided with connection points on each floor to tie into the building condenser-water system.
This is useful for areas requiring dedicated cooling 24/7/365, even during overtime hours when building cooling systems do not typically operate.
Supplemental cooling costs at PROPERTY A = $1000 per ton per year. No Tap in Fees.
Supplemental cooling costs at PROPERTY B = $450 per ton per year. No Tap-In Fees.
We assume roughly 25-Tons of supplemental cooling to be utilized on each floor. 250-Tons Total.
Supplemental cooling costs at PROPERTY A = $250,000 per year
Supplemental cooling costs at PROPERTY B = $112,500 per year
$250,000-$112,500 = $137,500 difference per year
PROPERTY A could cost approximately $137,500 MORE per year than PROPERTY B and approximately $1,375,000 more for supplemental cooling during the 10-year lease term.
Total Cooling Cost Differences
Overtime cooling cost difference = $198,400 per year
Supplemental cooling cost difference = $137,500 per year
overall COOLING COST DIFFERENCE = $335,900 per year
PROPERTY A could cost approximately $335,900 more per year than PROPERTY B and could cost approximately $3,359,000 more for cooling during a 10-year lease term.
$3,359,000 in Hidden Cost Differences between PROPERTY A and PROPERTY B !
$3,359,000
As you can see it is extremely important you use the services of an experienced design professional to asses these potential issues with your commercial office.
Need help assessing a commercial real-estate lease in regard to the MEP and HVAC systems? Contact Built Engineers & Architects for Due Diligence or Physical Conditions Assessments (PCA). Call 646.481.1861 or email info@builtengineers.com