NYU to Identify Energy-Efficient Commercial Real Estate Tenants

The Natural Resources Defense Council and New York University will partner to develop benchmarks for commercial tenants’ energy performance.

If successful, the partnership—formed by NYU’s Center for Urban Science and Progress and the Natural Resources Defense Council’s Center for Market Innovation—will help save businesses money and energy, officials said last week.


Constantine Kontokosta

As part of the plan, the team will identify about 1,000 commercial real estate tenant spaces in five major cities, including New York City, and work to create a rating system that compares energy use among users. The system will provide tenants with feedback related to their energy performance while recognizing leaders in the field.

“We have seen from a number of other industries that open, transparent information helps to reduce risk and uncertainty within markets,” said Constantine Kontokosta, deputy director of NYU’s Center for Urban Science and Progress and the project’s research leader. “Calorie labeling, for instance, helps customers make better informed choices about what to eat and encourages restaurants to develop healthier food options.”

“We anticipate that giving tenants a better understanding of how they use energy, and how similar tenants are using energy, will drive demand for more efficient spaces,” he said.

In most markets, owners typically control energy consumption in a few areas of a building, such as common spaces and exterior lighting. While tenant spaces account for more than 50 percent of energy consumption in commercial buildings, minimal efforts have been made thus far to increase energy efficiency in such spaces.

To improve energy efficiency, the team will work with tenants to develop better ways of measuring, modeling, and ultimately reducing energy consumption in buildings, Kontokosta explained.

“Our goal is to develop a national recognition program for commercial tenants that will motivate tenants to improve the efficiency of their spaces and create a competitive advantage for those that do,” he said. “Commercial tenants represent a critical stakeholder in the effort to reduce energy consumption in buildings, and this research will set the standard for data collection, analysis and benchmarking of tenant energy performance.” The initiative will monitor tenants’ energy consumption for 12 months after they receive feedback.

In the U.S., commercial buildings account for 41 percent of energy consumption and corresponding carbon consumption. This endeavor will provide significant opportunities for building owners and managers to improve the energy performance of their properties.

When asked how people can sign up to be included, Kontokosta said, “We will work with CBRE to identify tenants within their portfolio of properties that can participate in the research.”

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