NYU Schack Special Report: Energy Efficiency Still Key

Despite advances in sustainable technologies and renewables, efficient efficiency is remains the primary goal for property owners and an increasing challenge as overall demand rises. That was a key theme at NYU Schack’s Annual Conference on Sustainable Real Estate, which gathered public and private sectors executives to discuss their progress and aspirations for the future.

Brookfield, for example, has averaged a reduction of about 5 percent electricity usage over five years, said Michael Daschle, senior vice president of Sustainability for the company. And, while it is not anticipating energy demand increases at the property level, it is “definitely factoring in” higher energy expenditures because of increased capacity and greater demand for electricity over time. “The budgets are increasing even as the usage is different,” he said.

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Hines is also focused on keeping its demand low while introducing innovations into the market, according to Benjamin Rodney, vice president of Construction at Hines. Hines has installed solar at multifamily projects in jurisdictions that offer incentives, for example, and in New York City, it is pioneering the use of a geothermal energy network to power 345 Hudson St., which was recently renovated by Hines and partners Trinity Church Wall Street and Norges Bank Investment Management, and 555 Greenwich St., a ground-up development that abuts 345 Hudson.

Rodney said developers “are their own worst enemy” when it comes to energy pricing because they add to demand growth for the utility when they add square footage to the grid.  “The question is can I figure out a way to harness the energy coming in and reuse more of it before I have to ask for more,” he said.

In the case of some redevelopments, however, developers are significantly reducing demand. Daschle noted. After a renovation at 5 Manhattan West, Brookfield has improved the property’s performance by 40 percent on the energy consumption side, and at 660 Fifth Ave. the company installed “a complete new system”—and a new facade—to bring the building from 80 percent electric and 20 percent steam down to 95 percent electric and 5 percent steam,

“The performance of these redeveloped assets is much, much better and you kind of trend towards more electric over time,” Daschle said. “Then you’re also improving the climate emissions performance of the properties.” 

Waste not, want not

Both Hines and Brookfield have partnered with the New York State Energy Research and Development Authority’s Empire Building Challenge to help finance their energy efficiency projects.

Michael Reed, acting head of large buildings at NYSERDA, said that every real estate owner and operator he has worked with has identified a lot of waste heat and is interested in capturing it and re-utiilzing it. He pointed to Hines’ Hudson Square properties as an example of a developer who is realizing the possiblities. At 555 Greenwich, there are 68 pile-ons in the foundation that store excess energy that would otherwise be wasted.

“And then,” Reed added, “once you start talking about how do we connect a building’s excess heat to a nearby building’s need for heat, I think you are really into an interesting paradigm, but that is a long-term play for sure,”