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Valuing Energy Efficiency: Beyond the Empire State Building

Valuing Energy Efficiency: Beyond the Empire State Building Download Summary
Publication Date: 2015 Author: IMT Program Area:Finance & Real Estate

Nearly five years ago the large-scale energy efficiency renovation of the Empire State Building in New York City captured the imagination of both energy efficiency advocates and the building industry.  The project, which was part of a $550 million entire-building remodel, was projected to save 38 percent of the iconic building’s energy and $4.4 million in energy costs annually. The first three years of monitoring and verification of the installed energy efficiency measures, however, indicate that the project is already tracking ahead of those targets.

A flagship project that garnered noteworthy attention across the country, the success of the Empire State Building’s energy efficiency retrofit invited others to replicate the significant energy cost savings—which was, in fact, one of the project’s main goals. In the years that have followed, many large-scale energy efficiency retrofits have been completed or are now underway across the U.S., and this market is only expected to grow. Much of the attention around these retrofits, however, has been focused on Class A offices in a central business district, hospitals, and other large public buildings. This could lead some investors and building owners to conclude that energy efficiency retrofits are only economically viable in these building types, given their size, market presence, and access to funding and technical expertise—and that these efforts may not be as worthwhile in other buildings types, which make up the majority of the country’s existing building stock.

Valuing Energy Efficiency, a new package of case studies from the Institute for Market Transformation (IMT), breaks down this misconception by examining the financial outlay and impact of energy efficient retrofits on a range of building types across the U.S., to show that building owners do not need a billion dollar budget or a large floorplan to reap all the benefits of energy efficiency. The six buildings presented—including affordable multifamily housing, Class B office buildings, small manufacturing plants, and an old university laboratory—represent the true depth of existing buildings across America.

This summary paper provides an overview of the six projects highlighted in this new case study series.

Access the full series:

  • Laboratory Space: University of Minnesota, Minneapolis, MN. The retro-commissioning of the University of Minnesota’s Biological Sciences laboratory highlights the opportunity to invest in energy efficiency in the institutional sector, where optimizing an existing building’s energy performance can extend its useful life.
  • Mixed-Use Office Space: Self-Help, Wilmington, NC. Built in 1906, Self-Help’s downtown Wilmington property shows that an older building, likely designed without efficiency in mind, can improve its energy performance through retrofits while making the building more affordable for its retail, small business, and non-profit tenants.
  • Manufacturing Space: Tusco Display, Tuscarawas County, OH. The custom fabrication company Tusco Display has used energy efficiency in its manufacturing and commercial spaces as a strategy to lower costs, improve productivity, and gain a cost advantage in a challenging market with many competitors.
  • Multifamily Housing: Continental Plaza, Chicago, IL. Continental Plaza is a 1950s building that provides 164 affordable, one-bedroom apartments for seniors. To fulfill the U.S. Department of Energy’s Better Buildings Challenge, Hispanic Housing Development Corporation formed Affordable Community Energy, a unique mission-driven energy services company model to pursuing retrofits that cut its energy bill by 23 percent and its water bill by nearly 5 percent, while adding hundreds of thousands of dollars to the property’s value.
  • Office Space: Self-Help, Greensboro, NC. Through energy efficiency retrofits, Self-Help uses operational expense savings to help preserve affordable rents for 21 non-profit tenants in a mid-rise office building in Greensboro.
  • Multifamily Housing: CheckMate Realty & Development, Chicago, IL. CheckMate Realty, a Chicago property owner dedicated to providing high-quality affordable housing, worked with Elevate Energy and Community Investment Corporation to retrofit a 31-unit naturally affordable multifamily building in South Shore Chicago, originally built in 1928.

This summary originally misidentified the total cost of the Empire State Building retrofit. The project, as documented by the Rocky Mountain Institute, cost $550 million for an entire building remodeling. It was also part of a larger, $1 billion repositioning project spanning several properties owned by W&H Properties, the Empire State Building owner.