CASE STUDY

PAE Living Building

PropertyFit financed energy efficiency and renewable energy measures to support construction

Background

Gerding Edlen used PropertyFit commercial PACE financing to complete the project capital stack for Portland’s first Living Building, one of the most ambitious green building certifications available. The mixed-use building—consisting of class A office and retail space—will generate more energy and water than it consumes and is designed to be the largest commercial Living Building in the world.

Project Overview

PAE Engineers was looking to develop a new building in Portland to serve as its corporate headquarters, as the company had outgrown its existing office space. PAE was interested in the Living Building concept, having designed several others including the Bullitt Center in Seattle, WA, in which PAE is a tenant.

The Living Building Challenge is a rigorous performance standard administered by the International Living Future Institute (ILFI) that requires buildings to achieve net positive energy, water, and waste in addition to meeting other standards for design, health and wellness, materials, and social equity. The current standard requires that buildings have 12 months of continued operations and full occupancy to be eligible for certification.

Part of the inspiration for the design was to demonstrate that Living Buildings are not only technically possible on a dense urban site, but also financially viable using conventional financing mechanisms. The project is being privately developed and funded through a typical commercial real estate development model. The development team opted to finance a portion of the $25.3 million total construction cost using PropertyFit because it was a cost-effective alternative to additional equity with a longer financing term than other debt products. The $2.5M commercial property assessed clean energy (PACE) loan provided by PACE Loan Group completed a capital stack consisting of equity, construction loans, mezzanine debt, and small grants.

“We are excited that the project is proving that a Living Building is viable in a private investment model. PropertyFit was an important part of that equation and we hope to inspire many other private developers to reach for a Living Building as well.”

Marc Brune, Principal, PAE Engineers

During the project's planning phase, PAE leveraged Energy Trust of Oregon's Path to Net Zero offerings for energy modeling, daylighting analysis, commissioning, ILFI Zero Energy Certification, and overall energy use reduction strategies. As part of this collaboration, PAE also worked with Energy Trust to support the integration of an advanced solar system that is paired with energy storage and can provide grid optimization services.

The development team bid out certain scopes of work in order to meet the technical demands of the design. Of the participating contractors, nearly a third are minority-owned, woman-owned, or emerging small businesses.

The building—located in Portland’s Old Town District—is a 58,000 square foot mixed-use building with class A office and retail space. PAE occupies floors 3-5, with ground floor retail and second floor office space open to other tenants. The unique concept and design will result in a series of firsts for Living Buildings both locally and across the world.

The sustainability features of the PAE Living Building are extensive, ranging from traditional efficiency components to more innovative technologies and design features. The building is projected to use just 18.6 kBtu/sqft per year, which is 80% lower than a typical office building. A few project highlights include:

133 kW on-site rooftop solar array combined with a 195 kW off-site solar array located on a partnering affordable housing unit. The energy generated will supply 105% of the building’s demand while providing low-cost power to the residents of the housing unit.
71,000-gallon rainwater cistern to meet 100% of water needs through on-site collection and treatment.
Microgrid with 250 kW battery that allows the building to island itself in the event of power loss.
Structural design built to Risk Category (RC) IV, enabling a building lifespan of 500+ years. RC IV frames, required for essential functions such as hospitals, are 50% more resistant to seismic forces than RC II frames, the minimum required for office buildings.

In addition to the efficiency and seismic components, the building was designed to optimize the health and well-being of occupants through ample daylighting and views, natural ventilation, biophilia, and the use of healthy building materials. A full list of sustainability and design features can be found on PAE’s website.