Supplemental Cooling and After-Hours HVAC: Who Pays?

Office buildings are designed to keep people comfortable during business hours. The base building system serves whole floors or large zones, runs on a schedule, and is paid for through rent and operating expenses.

Technology tenants often need more than that, in two distinct ways.

• Comfort cooling outside building hours. Engineers working evenings and weekends need the regular system to run when it is normally off. This is after-hours or overtime HVAC.
• Equipment cooling at all hours. A server room, network closet, lab or cluster of high-heat workstations produces heat continuously and needs its own cooling that never shuts off. This is supplemental cooling.

Using the first to solve the second is a common and expensive mistake. Running a whole floor’s base building system all night to keep one equipment room cool means paying an hourly charge for far more cooling than the room needs, with no guarantee the zone temperature suits the equipment. If you have equipment that must stay cool, plan a dedicated unit.

The lease defines building hours. Outside them, the tenant requests service and pays a charge. The rate itself is only one of several terms that decide what you actually spend.

• ✓What are the building hours for HVAC, including Saturdays and holidays, and are they written in the lease?
• ✓What is the after-hours rate, and is it per hour per floor, per zone or per unit?
• ✓How large is a zone? If we occupy part of a floor, are we paying to condition space we do not lease?
• ✓Is there a minimum number of hours per request?
• ✓How much notice is required, and can we request service through an app or portal instead of a call to the management office?
• ✓Is the rate based on the landlord’s actual cost, or does it include a markup or administrative fee?
• ✓How can the rate increase over the term, and what is the increase tied to?
• ✓If another tenant on the same zone requests the same hours, is the charge shared?
• ✓Are after-hours HVAC costs kept out of operating expenses, so the same cost is not billed twice?

Teams with a predictable late pattern have more options than paying by the request. Ask for extended standard hours for your floor, a block of included after-hours time each month, or a rate fixed at the landlord’s actual cost of energy and wear. These are easier to win in a building with modern controls that can condition one floor without running the entire plant.

A supplemental unit removes heat from a room and has to send that heat somewhere. Where it goes determines what you need from the landlord. Your mechanical engineer chooses the system and sizes it for your equipment. The lease has to make the choice possible.

• Water-cooled units reject heat into a building water loop, usually called condenser water. They need a connection to that loop, enough loop capacity reserved for you, and the loop running whenever your unit runs.
• Air-cooled split systems pair an indoor unit with an outdoor condenser. They need a location for the outdoor equipment, commonly the roof, plus a path for refrigerant piping between the two and structural and landlord approval for the placement.
• Chilled water units use the building’s own chilled water where the plant can supply it at the hours you need. Many office plants do not run chilled water overnight or in winter.
• Units that reject heat into the ceiling space or adjacent office area are sometimes used for small loads. Building management often restricts them because the heat becomes the base building system’s problem.

Whatever the type, the unit also needs electrical capacity, a condensate drain, and access for service. Ask your engineer whether a single unit is enough or whether a second is warranted so cooling continues if one fails or is being serviced.

In many multi-tenant office buildings, condenser water is the practical route for supplemental cooling, and it is where landlords have the most room to charge. The loop is a shared, finite resource. A landlord may have plenty available, or may have committed most of it to earlier tenants.

• ✓Does the building have a condenser water loop available for tenant supplemental units, and does it reach our floor?
• ✓How much capacity can be reserved for us, and will the lease state it?
• ✓Is the loop operated at all hours, every day, in every season?
• ✓Is there a one-time connection or tap-in fee?
• ✓What is the ongoing charge, and is it based on reserved capacity, metered use or a flat fee?
• ✓How can that charge change during the term?
• ✓If we need more capacity later, do we have a right to it, and at what price?
• ✓What happens to our cooling when the loop is shut down for maintenance, and how much notice do we get?
• ✓Is the loop on backup power, if our equipment is?

The reservation matters as much as the price. A right to connect is of little use if the remaining loop capacity is given to another tenant before you expand. If your equipment plan grows, ask for the future capacity to be held now.

Ask the landlord for the building’s existing supplemental cooling terms in the proposal. The connection fee and the ongoing charge are both negotiable before the lease is signed and rarely afterward.

If the system needs outdoor equipment, you need more than permission in principle. The lease should cover the full route from the room to the roof.

• A defined roof or exterior location, with any rent or license fee for it stated. Many landlords charge for roof space unless the lease says otherwise.
• The right to run piping and wiring through shafts and risers outside your premises, on a described path.
• Structural review of the equipment’s weight, and who pays for it.
• Use of the landlord’s roofing contractor for penetrations so the roof warranty is preserved.
• Noise and vibration limits, and screening requirements.
• Access to the roof for your service contractor, including outside business hours when a unit fails.
• Protection against being relocated, or at least relocation at the landlord’s cost with no interruption.

Landlords will require plan approval, and approval standards for mechanical work are stricter than for partitions and paint. Ask that consent not be unreasonably withheld, and ask the landlord’s engineer to review the concept before the lease is signed so an objection does not surface during construction.

Installation is the visible cost. The recurring ones run for the whole lease.

1. Decide who pays for installation: the tenant improvement allowance, the landlord as part of delivering the space, or you directly.
2. Confirm how the unit’s electricity is metered and billed, since it runs continuously.
3. Put a maintenance contract in place with a qualified service firm. Leases usually make the tenant responsible and may require proof of regular service.
4. Add leak detection and a monitored temperature alarm. Water-based systems above someone else’s ceiling create liability, and your insurance broker should know the system exists.
5. Settle ownership and removal. Ask that a working unit may remain at the end of the term with no restoration obligation, and get that in writing when the plans are approved.
6. If you take over space with an existing unit, have it inspected, confirm who owns it, and do not accept maintenance or replacement responsibility for equipment at the end of its life without pricing that in.

Tenant Advisory Group represents tenants and buyers, and for technology companies we put after-hours rates and supplemental cooling terms into the request for proposal so the full cost of cooling is compared across buildings, with your engineer and attorney confirming the technical and legal details.