A program to help commercial building tenants cut energy consumption and lower energy costs was announced on October 26, 2016 by the Urban Land Institute (ULI). Called the Tenant Energy Optimization Program, it is a process that integrates energy efficiency into tenant space design and construction and delivers significant investment returns through energy conservation.
Tenant spaces generally account for more than half of a building’s total energy consumption, making the program essential to improving the environmental performance of buildings. The program connects tenants, building owners, real estate brokers, project managers, architects, and engineers to create energy-efficient workplaces using practices that are proven, replicable, measurable and scalable.
The program, initiated by ULI leader Anthony E. Malkin, ... originated as an effort to reduce tenant energy use in the Empire State Building as part of a major “greening” makeover of the iconic skyscraper. With Malkin’s support, ten tenants in the Empire State Building and in other locations adopted the process, including Shutterstock, Inc.; LinkedIn Corp.; Bloomberg LP; The Estee Lauder Companies; and Cushman and Wakefield, Inc. In the ten pilot projects, tenants have experienced energy savings of 30 percent to 50 percent; payback on their investment in as little as three to five years; and an average annual internal return rate of 25 percent.
“The program’s step-by-step process is an effective way for companies to cut their energy costs and boost their bottom line while achieving corporate goals related to sustainable, energy-efficient workplaces,” Malkin said. “It enhances their ability to attract, retain and motivate workers who are healthier, happier, and more productive.”
One advantage the program provides is scalability; whether a tenant is leasing 2,500 or 250,000 square feet, the process can help improve the space’s energy efficiency, and reduce operational costs and energy consumption to generate greater financial returns. Another advantage is replicability — tenants and service providers who have gone through the process are expanding it to other parts of their portfolio and introducing the process to others.
The process involves tenants working with service providers and building owners to select energy- efficient space and a set of energy performance measures to customize a plan that best meets their energy savings and budget goals.
The process consists of ten steps that involve selecting a team and office space, setting energy performance goals, modeling energy reduction options, calculating projected financial returns, making final decisions about implementation, developing a post-occupancy plan, building out the space, executing the post-occupancy plan and communicating results.
Through measurement and verification, tenants are able to demonstrate energy and financial savings. This is reflected in the positive results already documented by the ten companies using the process: