Smarter Business: Case Studies

Skanska reception

Photo: Skanska USA

Challenge

According to the U.S. Department of Energy residential and commercial buildings account for almost 39 percent of total U.S. energy consumption and 38 percent of U.S. carbon dioxide (CO2) emissions. In an effort to reduce the company's energy costs and environmental footprint as well as create an improved work environment, in 2008 Skanska USA decided to relocate its flagship New York City offices to the Empire State Building (ESB), which shares their mission of energy efficiency and sustainability. Skanska set a goal to achieve LEED Platinum certification, the highest level LEED certification the USGBC awards for green commercial interiors, for its new U.S. headquarters in NYC. Skanska also aimed to offset the LEED Platinum's higher initial costs (relative to the established budget for a traditional Class A office space), with an estimated 30 percent annual energy savings over the 15-year lease period. 


Strategy

Skanska began the extensive build out of their flagship NYC office in the new ESB location in June 2008. The Skanska high performance build-out coincided with the ESB owner's decision to make deep central system retrofits to the ESB. This integrated building retrofit approach provided Skanska with an enhanced Return on Investment from the energy conservation and indoor environmental quality (collectively, “high performance”) measures that Skanska decided to incorporate into the build-out of its tenant space.In particular, the improvements made to the ESB's building envelope (through window improvement and radiant barrier work) helped maximize the energy savings accruing to Skanska from its newly installed energy conservation measures.

In order to achieve greater cost savings over time, Skanska incorporated measures that carried a small initial cost premium over standard building materials (such as electrical metering and control devices, etc.). Design choices, especially when made at a very early stage, played a critical role in reducing many aspects of the project's first costs.

"Skanska was thus able to achieve the LEED Platinum rating at a break even point of just under five years by utilizing envery savings from the build out itself." -- Integrated Building and Tenant Space Case Study, NRDC Center for Market Innovation

Results

Skanska's experience demonstrates a positive business case overall for efficient and green tenant build outs. The project's total cost was $4,624,262, which is greater than a hypothetical Class A office budget by $210,858 or $8.64/rentable square feet (by 4.7 percent). However, the up-front investment is on track to pay for itself in five years, exceeding expectations.

The table below summarizes Skanska's budget analysis, containing best estimates for initial costs of a traditional Class A office space and the actual LEED Platinum fit out cost of Skanska's space:

Total Project Cost

Total Cost

(Per Rentable Square Foot)

Construction Cost

(Per Rentable Square Foot)

Traditional Class A Office Budget

$4,413,404

$180.88

$121.45

Skanska Actual Costs for LEED Platinum fit out

$4,624,262

$189.52

$132.95

LEED Premium

$210,858

$8.64

$11.50

Total LEED Premium 4.7%

(LEED incremental total cost/LEED project total cost)

Electricity Savings

(NPV for 15 years)

$683,200

 

 

NYSERDA Grant

$20,527

 

 

Net Savings

$492,869

(Total electricity savings +NYSERDA grant) – (LEED premium)

Total net savings 11% (over 15 years)

(Total electricity savings +NYSERDA grant)/(LEED premium)


About

Skanska AB, founded in 1887 in Stockholm, Sweden, is one of the world's largest construction companies. In 2010, Skanska had 52,000 employees and a total of $19 billion in revenue. Skanska USA is Skanska's second-largest operating business unit, with its specialized units Skanska USA Building and Skanska USA Civil for building and civil construction respectively.

In 2000, Skanska was the first global and construction company to achieve the ISO 14001 environmental certification. In 2007, the company launched a new green initiative—a plan to strengthen the company's role in environmental and energy conservation by creating energy-efficient buildings with reduced carbon dioxide emissions. To further its commitment to sustainable development, in 2008 Skanska formed a corporate Green Construction team to accelerate its access to markets emerging from climate change regulation and voluntary carbon reduction activities.

Skanska USA's green expertise now includes over 500 LEED accredited professionals. Through 2008, Skanska USA had completed 70 LEED projects and was ranked the top U.S. green builder by Engineering News-Record in its first-ever Top Green Contractors survey released in 2007. In 2008, Skanska USA created its local “Green Councils” and introduced its first “Green Office Manual”.


Resources

Skanska USA Zero Impact Policy and Sustainability mission

NRDC's Center for Market Innovation

 The Empire State ReBuilding

last revised 6/16/2011

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