Project Deep Dive: Fiddlers Green I & II
When reviewing their portfolio, it was clear to the John Madden Company’s executive team it was time to address the aging mechanical systems on their Fiddlers Green I & II properties. At almost 20 years of age, the systems were no longer on par with the rest of these twin (200,000+ sf each) Class A office buildings located in the Denver Tech Center. The iconic buildings are well known and encircle Denver’s Fiddler’s Green Amphitheater.
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One of Denver’s premier development companies, The John Madden Company was responsible for developing a huge swath of the Denver Tech Center and today are owners of many premier commercial properties in the Denver market. Always looking for ways to include innovation, CEO Blair Madden connected with Integro to discuss creative ways to accomplish their goals of not only upgrading their properties, but also making them more energy efficient and creating a smaller carbon footprint in the process. Integro is a commercial real estate consultancy group that specializes in C-PACE financing. C-PACE is an exciting new financial tool in the Commercial Real Estate space that incentivizes CRE owners to make capital improvements that improve energy efficiency, reduce resource consumption (H2O), or add renewable energy (solar, wind, etc).
Working together, the teams from John Madden Company and Integro were able to identify critical upgrades to the buildings that fit within the C-PACE program. Integro was able to show how to leverage the savings created by becoming more energy efficient, converting those same dollars into what services the C-PACE financing. In effect making the capital improvements pay for themselves. Between the two buildings, over $7,000,000 in C-PACE financing was used to upgrade a broad array of capital improvements: Rooftop units, Building Controls (BAS), Lighting, Active Energy Management, LEED Certification, Evaporative Coolers, Advanced metering and even some H2O Measures were all wrapped into the deal. One of the key benefits of the C-PACE program is that it allowed the $385,000 in annual energy savings (or 30%) to be reallocated away from the utility provider, and instead used to service the financing that pays for all the capital improvements. The Madden Company, with Integro’s guidance, was able to overhaul their critical infrastructure without using any of their capital and using the money theywill save on annual energy bills to service the financing. This approach also allowed them to optimize their NOI. Because the C-PACE financing is repaid as a voluntary special assessment on the property tax bill, it is 100%, up to 20-year, non-recourse financing. The property is the borrower and therefore the obligation for repayment transfers with ownership.
Two of the largest tenants of these soon to be overhauled Class A properties include Charter Communications and Fidelity investments. Both tenants were pleased to be in a building that will be much more energy efficient and soon LEED certified, as this aligns with their corporate
Blair Madden, the CEO of John Madden Company, and the Integro team were beyond pleased with the outcome, and look forward to the project completion later in ’18, as these properties will now have the energy efficiency standards that match their top tier aesthetics and location.