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Dynamic Commercial News
June 2013 
Inside This Issue
Measuring ROI
Not Too Late
Dynamic and Data Centers
Attention Sales Engineers
IAQ Links
Green Schools
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This month we take a look at Return on Investment (ROI) and what drives great ROIs. Depending on your audience, they are apt to rely on different metrics to measure ROI. We are fortunate to have products that make it a no-brainer when the owner is looking at MERV 13 or better filtration. Whether your project is owner-occupied or multi-tenant, there is almost always a strong case for spending a little more on air cleaning systems on the front end. Not only will you save money in the long run, but you will be able to enjoy all of the benefits of clean, healthy air.

Carl Mitchell, Vice-President Sales



Measuring ROI



ROI means different things to different people


The business case for green building upgrades is solid. And air cleaning systems from Dynamic Air Quality Solutions produce tangible and easily quantifiable savings. The Dynamic ROI calculator identifies energy cost savings and reduced maintenance costs which can simplify your projects' payback analysis. But there may be other less tangible drivers that will greatly enhance ROIs, depending on the perspective of the stakeholder you are addressing.




Be sure to factor in local and economic utility and tax incentives. Although these are not accounted for in the Dynamic ROI calculations, they can sometimes have a big impact. Productivity gains represent another means of enhancing ROI. Schools, for example, are always actively looking for ways to improve attendance rates and test scores and studies have linked improvements in both areas to better IAQ.


Owner Metrics


It's also important to understand the metrics that the owner will use to measure ROI. ROIs are multi-dimensional. In owner-occupied properties, owners have a long term view. Savings drop to the bottom line. They look at:


            Asset Value

            Lower Operating Costs

            Ranking with Peers/Competitors

            Sustainable Objectives

            Workplace Productivity


In multi-tenant properties, owners may have a shorter term view. Energy and operating cost savings accrue to tenants as reduced costs. Key metrics for these owners are:


            Asset Value

            Maximizing Occupancy

            Maximizing Lease Rates

            Appealing to tenants "Green" Needs



LEED-certified and Energy Star commercial office buildings enjoy 1) increased rents, 2) increased occupancy, 3) higher property resale price, and 4) a perception of higher quality ownership and property care.* In terms of asset value, green buildings, on average, sell for a premium of about 13 percent.**



LEED-certified buildings have a 4.1% higher occupancy rate than peers, and sell for an average of $174/sf more. Energy Star Buildings enjoy a rent premium of $2.40/sf compared to peers, and a 3.6% higher occupancy rate.




There is conclusive evidence that among green buildings, increased energy efficiency is fully capitalized into rents and asset values.


There are other ROI influencers to Asset Value:

  • Risk Mitigation - Energy is the largest percent of building operating costs (and the most controllable). Many cities have premiums for peak demand periods.
  • Recruitment/Retention - Getting and keeping good people is increasingly important. Good talent can always find another home. And energy/green upgrades are tangible signs of employer commitment.
  • Marketing & PR - Owners play up the value of being one of 50,000 LEED registered buildings, and/or 20,000 Energy Star buildings.
  • Productivity & Health - People costs are 100 times greater than energy costs. There is evidence that better IAQ and lighting provides a 3-5% gain in productivity.
  • Sustainability - Both internal and external stakeholders care about sustainability. 70% of stock value is "reputational capital." The reporting of sustainable practices is global and increasingly required by governments, investors, and customers. And corporate sustainability officers are actively looking for ways to meet their company's goals and objectives.   

Dynamic provides an excellent return on investment - based solely on energy and maintenance, as shown below.


And life cycle cost savings can be much greater where ventilation air can be reduced, as shown here.




Many ESCOs look at another metric --- DVA, or Dollar Value Added. DVA is a form of Net Present Value and shows savings over the lifetime of the equipment. Expressed in this manner, Dynamic V8 Air Cleaning Systems at the Time and Glass Museum (above), return an impressive $130,990...even without factoring in the additional savings that could be obtained from reduced ventilation air.


Initial cost is $15,010

Annual savings of $7300   

20 years expected equipment life x $7300 = $146,000    

Total Savings less first cost = $130,990


Enhanced ROIs targeted to the perspective of your stakeholder, can take your project from a "no-brainer" to a "slam-dunk". For more information about the Dynamic ROI calculator, contact your Dynamic rep or give us a call.


* Source: http://www.stuartkaplow.com/library3.cfm?article_id=191

** P. Eichholtz,N. Kok, J. M.Quigley, Sustainability and the Dynamics of Green Building, Review of Economics and Statistics, 2011.


Not Too Late to Claim EPACT Energy Upgrades



Owners may still qualify for tax deductions for upgrades between 12.31.05 an 12.31.14


The Energy Efficient Commercial Building Tax Deduction, IRS 179D, also called EPACT, was designed to reward owners of commercial buildings who comply with higher energy efficiency standards. To make the tax incentive process easier and eliminate burdensome amended tax returns, the IRS has issued Revenue Procedure 2011-14. With this process, a commercial property owner can use IRS Form 3115 to calculate the missed incentive and report it on the next filed tax return. This process is particularly convenient for properties owned by multiple investors because individual investors do not have to amend their personal tax returns.


Section 179D allows up to $1.80 per square foot in deductions to those who have upgraded their building's lighting, HVAC, or building envelope. You can take the Section 179D deduction if you are:

  • Owners of energy efficient commercial or multifamily properties built or retrofitted since 12/31/2005.
  • New commercial and municipal buildings, retrofitted buildings, and LEED buildings of more than 20,000 square feet.
  • Architects, engineers, ESCOs, and designers of energy efficient municipal building projects. (LEED certified buildings easily qualify.)

The 179D deduction provides a one-time accelerated depreciation for commercial, multifamily, and public agency-owned facilities. To qualify for the Section 179D tax deduction, the IRS requires an independent, third party energy tax study. Architects and construction companies that have designed energy efficient buildings for public agencies are also eligible.

The Energy Policy Act of 2005 enacted Internal Revenue Code Section 179D. The Energy Efficient Commercial Building Deduction, originally created as part of the EPAct of 2005, is usually known simply as Section 179D. The federal tax deduction is calculated based on the energy efficiency of a commercial building, as compared to a 2001 benchmark ASHRAE 90.1-2001



Dynamic and Data Centers


Dynamic Air Quality Solutions Martin Cummins (Princeton, NJ), Suffolk Construction project exec Rob Nichols (Davers, MA), and HGA VP Kevin Farquhar trekked across the Potomac from Alexandria to attend the Bisnow Data Center Show in Washington DC 6/19-20/2013.

According to Martin, "Saving energy is critical to Data Centers and they were very receptive to Dynamic as an important ECM (energy conservation measure).



Sales Engineers - Do you have clients that would benefit from this newsletter?      

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Registered users at www.DynamicAQS.com/commercial/ have access to additional detailed information such as Dynamic Air Cleaner submittals and specifications. Sign up today! 

About Dynamic Air Quality Solutions
Since 1982, Dynamic Air Quality Solutions' mission to its customers has been to develop and bring to market innovative, technologically advanced and affordable solutions to help clients optimize air quality, energy consumption, and the environment. For more information, visit our website at www.DynamicAQS.com/commercial/.