In Manhattan alone, there are over 530 million SF of office space. Therefore, to stem the impacts of climate change, the sustainability of our workplaces must be improved. Some real estate companies like Oxford Properties Group are paving the way to a more sustainable future with industry-leading action. Last year, Oxford completed equipment upgrades as part of a wider capital and operations plan at 450 Park Ave, a 32-story office building in Midtown built in 1972. With the upgrades and operational improvements, 450 Park Ave was the first building in New York to achieve Platinum certification under LEED v4.1 Operations+Maintenance.
Before embarking on the path towards LEED certification, the Oxford property team at 450 Park Ave coordinated with Oxford’s corporate global sustainability team to conduct a feasibility study. The group sought to reduce operating costs, increase efficiency, and create a healthy and comfortable indoor environment for its tenants. LEED certification consolidates these improvements by using quantifiable sustainable metrics to assign scores to various categories such as Energy & Atmosphere, and Indoor Environmental Quality. The wide range of options provides property teams the flexibility to focus on initiatives that will provide the largest environmental and operational impact to the property.
At an early stage, the Oxford team determined the work and resources required to attain LEED Platinum, the highest rating achievable. Meeting the high standards of LEED Platinum positively impacts the valuation and rents of an office building because tenants can readily reference the sustainability features implemented and measurably achieve their corporate ESG goals.
According to the UN Environment Program, buildings represent 39% of global carbon dioxide emissions. In New York City, that statistic jumps up to 67% with the city’s high density. The largest source of emissions in office building operations are heating/ventilation/cooling (HVAC) at 30% and lighting/electronics at 32%. Over the last few years, the Oxford team at 450 Park Ave implemented several changes that address these two sources of emissions. By piloting new technologies such as the Armstrong design envelope pump system, the property team will reduce HVAC energy consumption by 60-70%. This was achieved by automating the optimization of pump operating speeds based on HVAC demand, a process that previously required manual input from building engineers.
Executing a LEED project is not performed in a silo by the property team. Some improvements at 450 Park Ave required collaboration between tenants and building management for items such as increasing LED lighting, integrating occupancy controls, and optimizing equipment. Even introducing a new recycling program to attain credits in LEED’s waste diversion category requires continual outreach through Green Team meetings/events to be successful. At 450 Park Ave, the building operation improvements did not disrupt tenants because the updates in operational practices and equipment installations were implemented in the mechanical or back of house areas. However, for other projects where upgrades may require temporary shutdowns or restricted access to common areas, the information must be communicated clearly with tenants to ensure a smooth project.
While the replacement of building equipment often increases efficiency, not all sustainability improvements require significant capital expenditures. By monitoring historical electrical demand usage to establish equipment startup timing and set points, the Oxford team at 450 Park Ave was able to lower the peak electrical demand and therefore lower operational costs as well. As shown in the graph below, energy demand varies significantly throughout the day. The goal of lowering electrical usage during peak hours is to increase the efficiency of the electrical grid. Utilities must upsize their generators, transmission lines, and transformers to meet peak demand, even if peak demand only lasts for one hour during the day.
With its corporately driven climate and energy action plan, Oxford Properties has successfully implemented a sustainability project at 450 Park Ave that others can hopefully emulate. Over the next four years, real estate companies in New York City will undoubtedly focus on planning and executing capital projects to meet Local Law 97 requirements. Because operators will face financial penalties for non-compliance and the standards will become more stringent over time, real estate companies must be forward-thinking in creating an actionable sustainability plan for the decades to come.
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