Summary

The Decarbonizing New York City Offices project team broadly surveyed real estate industry stakeholders, leveraging their expertise and insight, to guide the development of practical tools designed to promote strategic energy efficiency investments, decarbonization strategies, and forward- thinking leasing practices within commercial real estate.

In the fall of 2020, the New York State Energy Research and Development Authority (NYSERDA) launched the Decarbonizing New York City Offices project, an initiative to drive energy efficiency in commercial real estate and advance New York’s ambitious climate goals in the midst of pandemic- related workplace changes.

As a critical first step, the project team developed and disseminated an industry survey to gather feedback from key stakeholders who have knowledge of or influence over the tenant leasing process, space design, and operations.

The survey results shed light on new energy efficiency priorities and provide a deeper understanding of potential stakeholder knowledge gaps. The project team will utilize findings from the survey as well as insights from the project’s Steering Committee and other subject matter experts, to inform the development of engaging and actionable industry resources designed to spur impactful retrofits and leasing practices within the commercial real estate sector.

Respondents

Overall, 270 individuals took the survey, providing findings that are indicative of industry trends. More than half of all survey respondents were consultants, including: architects, engineers, and sustainability consultants. Brokers and attorneys had just five and three respondents, respectively, highlighting the need for further strategic outreach to these groups in order to gain additional insights. The project team is using targeted interviews and curated workshops to supplement the survey findings.

Key Findings

After analyzing survey responses, the project team identified findings within three key focus areas: COVID-19 Impacts, Energy Efficiency Trends, and Intervention Opportunities. The following takeaways highlight the challenges and opportunities the commercial real estate industry currently faces.

COVID-19 Impacts

• The pandemic has triggered significant shifts in work patterns.
• Commercial real estate stakeholders are prioritizing safe and healthy buildings, particularly indoor air quality, before energy efficiency.
• Uncertainty regarding space needs is driving tenants to postpone major decisions, such as signing new leases or renewals, and to pursue protections, such as flexible lease terms.

Energy Efficiency Trends

• The pandemic revealed a significant misalignment between energy consumption and building occupancy, but the industry aims to mitigate this discrepancy.
• Existing policies are driving increased collaboration and data-sharing between building owners/managers and tenants.
• Educating stakeholders regarding the financial costs and funding opportunities of energy efficiency projects is an effective engagement strategy.

Intervention Opportunities

• Both business-as-usual operations and inefficiencies uncovered in 2020 highlight challenges and opportunities to improving energy efficiency in tenant spaces.
• Reducing operating costs are the primary motivator that drive all stakeholders to pursue energy efficiency within office buildings.
• Tenants and building owners tend to prefer low- and no-cost measures over capital intensive strategies.
• Building owners plan to leverage leases to advance energy efficiency measures in an effort to comply with LL97 emissions caps by reducing overall building energy consumption.

Next Steps

This survey highlights the current state of the market in terms of energy efficiency motivations and barriers given the changing workplace environment. As part of the next steps in developing impactful resources for each stakeholder that will steer the industry towards sustained decarbonization of tenant spaces, the project team plans to undertake the -following:

Strategy

• Through additional research and engagement, the team will narrow in on information and tools required to ensure major energy saving improvements and the most effective methods to deliver information to the appropriate stakeholders.

Resource Development

• Once impactful resource opportunities are identified, the project team will create curated “Stakeholder Playbooks” for each stakeholder to provide them with the knowledge and tools necessary to make deep energy retrofits of commercial tenant spaces the industry standard.

Outreach and Delivery

• The team will then devise and implement an effective outreach strategy to ensure that the resources developed reach the most critical stakeholders with the intention of gaining traction within the industry.