Jones Lang LaSalle drove retrofit projects, tenant build-out program that produced energy savings ahead of plan to reduce usage by 38 percent
NEW YORK, NY – June 14, 2012 – (RealEstateRama) — One year after an innovative building retrofit project, the Empire State Building is ahead of plan and has exceeded its year one energy-efficiency guarantee by 5 percent, saving $2.4 million and establishing a commercial real estate model for reducing costs, maximizing return on investment, increasing real estate value, and protecting the environment.
“First and foremost, making the Empire State Building energy efficient was a sound business decision that saved us millions of dollars in the first year,” said Anthony Malkin of the Empire State Building Company. “We have a proven model that shows building owners and operators how to cut costs and improve the value of their buildings by integrating energy efficiency into building upgrades.”
Mr. Malkin and the Clinton Climate Initiative (CCI) Cities program, an aligned partner of the C40 Cities Climate Leadership Group, assembled a coalition of leading organizations focused on energy efficiency and sustainability. The team was comprised of the Empire State Building Company, LLC; Johnson Controls, Inc.; Jones Lang LaSalle; and Rocky Mountain Institute.
The core energy efficiency retrofit undertaken by Johnson Controls and Jones Lang LaSalle is complete, with the balance of the project to be finished as new tenants work with Jones Lang LaSalle to build out high-performance workspaces. Not only is the Empire State Building more energy efficient, but it is also estimated to have saved 4,000 metric tons of carbon, the equivalent of that offset by 750 acres of pine forests. Once all tenant spaces are upgraded, the building will save $4.4 million a year, a 38 percent reduction of energy use that will cut carbon emissions by 105,000 metric tons over the next 15 years.
“Our work at the Empire State Building demonstrates that a major reduction in energy usage can be cost-effective in terms of energy savings, and can enhance a building’s appeal to high-quality tenants,” said Ray Quartararo, international director at Jones Lang LaSalle. “As we continue to work with new and existing tenants, we find that the overwhelming majority of people want to do their part to reduce energy usage while delivering economic returns and occupying an environmentally responsible building.”
“These promising first-year results underscore the impact of this global flagship project, which continues to serve as a model for sustainable climate action, not only for other building owners in New York, but right across the global network of C40 Cities,” says Terri Wills, Director of Global Initiatives, C40, in partnership with the Clinton Climate Initiative. The Chair of C40 is New York City Mayor Michael Bloomberg.
“Mr. Malkin had a vision of bringing innovation to his historical landmark. The results are just beginning to pay off while at the same time creating a new model for the world to follow,” said Dave Myers, president of Johnson Controls, Building Efficiency. “It is critical that we tackle the billions of square feet of inefficient office buildings around the world to meet our growing energy needs, save money, create jobs, and reduce greenhouse gas emissions.”
“The saving achieved by the deep retrofit was due in large part to three factors: Tony Malkin’s vision and leadership, a team that could test traditional assumptions, and integrative design, which made bigger savings cheaper than incremental savings,” said Amory Lovins, Rocky Mountain Institute’s chairman and chief scientist.
The retrofit project focused on eight innovative improvement measures addressing core building infrastructure, common spaces and tenant suites. Improvement measures performed by Johnson Controls and Jones Lang LaSalle included the refurbishment of all 6,500 windows, a chiller plant retrofit, new building controls, and a web-based tenant energy management system. The project partners developed a detailed engineering design and Johnson Controls guaranteed the energy savings through a $20 million performance contract. With performance contracting, savings in energy consumption from facility upgrades pay for the project over the term of the contract. If the savings are not realized, Johnson Controls pays the difference between the value of the measured and verified consumption and the guaranteed consumption under the contract.
The project has attracted new tenants including LinkedIn, Skanska, Li & Fung, Coty Inc., and the FDIC. Such tenants look for space that reflects their sustainability values, provides more comfort for employees and allows them to monitor and control their energy use.
To ensure that each energy project resulted in performance improvements as predicted by the replicable project development model, Johnson Controls and Jones Lang LaSalle developed a measurement and verification (M&V) process that included baselining; energy model calibration; updating assumptions regarding weather, tenancy and operational improvements; and actual performance improvements attributable to each project. The annual savings for the project are calculated based on the International Performance Measurement and Verification Protocol – Option D, using a calibrated eQuest energy simulation model.
In the United States, 40 percent of energy is consumed by buildings, according to the World Business Council for Sustainable Development. In dense urban settings like New York City, commercial buildings account for up to 75 percent of energy used. If every commercial building in New York City followed this blueprint, carbon emissions would be reduced by 4 million tons – the equivalent to that generated by a typical coal-fired power plant.
Jones Lang LaSalle is a leader in the New York tri-state commercial real estate market, with more than 1,750 of the most recognized industry experts offering brokerage, capital markets, facilities management, consulting, and project and development services. In 2011, the New York tri-state team completed approximately 15.9 million square feet in lease transactions, completed capital markets transactions valued at $1.57 billion, managed projects valued at more than $6.8 billion, oversaw a property and facilities management portfolio of 63.6 million square feet, and an agency leasing portfolio of 49.8 million square feet.
About C40 partnership with CCI
C40 is a network of large and engaged cities from around the world committed to implementing meaningful and sustainable climate-related policies and programs locally that will help address climate change globally. C40 works in an aligned partnership with the Clinton Climate Initiative (CCI) Cities program, which was started by the William J. Clinton Foundation. CCI Cities became the delivery partner of C40 in 2006. The closer alliance between the two organizations — announced in the spring of 2011 — brings significant resources and infrastructure that will enhance and accelerate their historic activities and positions the combined effort as one of the preeminent climate action organizations in the world. To learn more please visit http://www.c40.org/.
About Johnson Controls
Johnson Controls is a global diversified technology and industrial leader serving customers in over 150 countries. Our 162,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful. In 2011, Corporate Responsibility Magazine recognized Johnson Controls as the #1 company in its annual “100 Best Corporate Citizens” list. For additional information, please visit http://www.johnsoncontrols.com.
About Rocky Mountain Institute
Rocky Mountain Institute is an independent, entrepreneurial, nonprofit think-and-do tank. RMI emphasizes integrative design, advanced technologies, and mindful markets in fulfilling its mission to drive the efficient and restorative use of resources. RMI’s strategic focus is to map and drive the U.S. transition from fossil fuels to efficiency and renewables by 2050. Visit http://www.rmi.org for more information.
About the Empire State Building
Soaring 1,454 feet (from base to antenna) above Midtown Manhattan, the Empire State Building is the “World’s Most Famous Office Building.” With new investments in infrastructure, public areas and amenities, the Empire State Building has attracted first-rate tenants in a diverse array of industries from around the world. The skyscraper’s robust broadcasting technology supports all major television and FM radio stations in the New York metropolitan market. The Empire State Building was named America’s favorite building in a poll conducted by the American Institute of Architects. The Empire State Building Observatory is one of the world’s most beloved attractions and is the region’s #1 tourist destination. For more information on the Empire State Building, please visit www.esbnyc.com, www.facebook.com/EmpireStateBuilding or @EmpireStateBldg.
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.2 billion of assets under management. For further information, please visit www.joneslanglasalle.com.
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