Smarter Business > Center for Market Innovation

A collaborative approach between building owners and occupants is essential to optimizing the performance of commercial office buildings, and tenant demand will be a critical factor in driving the market toward optimizing commercial building performance. The Natural Resources Defense Council's Center for Market Innovation (CMI) has established a High Performance Demonstration Project (the "Project") aimed at accelerating demand for high performance tenant spaces in the commercial office market by demonstrating their economic benefits.

"Energy efficiency opportunities and green fit-outs in tenant spaces often go hand in hand with improved work environment and employee productivity. Coupled with tangible bottom line improvement, which CMI's first set of projects are demonstrating, there's a compelling business case for incorporating energy efficiency measures in commercial buildings."

Kyung-Ah Park
Managing Director, Goldman Sachs

The Project aims to promote the compounding effect of owner/tenant collaboration, as tenants who value high performance spaces choose to locate or remain in buildings with highly efficient central systems and transparent energy management practices. As a result, building owners investing in central system energy efficiency improvements will not only garner operating savings, but will also gain competitive advantage in attracting and retaining these high value tenants.

CMI's Project team is modeling, quantifying, documenting, and publishing the energy savings generated by a series of high efficiency tenant build-outs, and the corresponding return on the tenants' respective incremental investments in the installed energy performance measures (EPMs). The Project case studies will also note the value placed by tenants on various other advantages to these build-outs, including furthering corporate social responsibility goals, and increasing employee attraction, retention, and productivity.

CMI has engaged several industry leaders as technical advisors for the Project, including Goldman Sachs, Johnson Controls, Jones Lang LaSalle, Empire State Realty Trust, SKANSKA, and ULI/Greenprint. This work is made possible by the generous support of Goldman Sachs and the Rockefeller Foundation.

CMI's internal team of experts engages directly with tenant build-out projects, helping to deliver a high performance workplace, and documenting actual space performance results. The CMI team is versed in real estate, engineering, financial analysis, construction and building efficiency. This multi-disciplinary approach serves to bring a more comprehensive perspective to projects. Utilizing the Project's grant funding, our experts assist the tenant's design team in completing a thorough evaluation and financial analysis of opportunities to integrate energy efficiency into their existing design.

CMI's process looks to present an optimal set of energy performance measures that will provide 30 to 50 percent energy use savings compared to a standard code-compliant build out, with a payback between three to five years. By providing projected energy use through energy modeling, incremental costing and financial analysis during the design and decision making process, the CMI process equips the tenant and its existing facilities/design team with the right information to determine tiers of good, better, and best packages of energy measures to incorporate into the design of the space. The CMI team also works with each participating tenant to develop and execute a protocol to measure and verify the actual energy performance of the new space for 12 to 15 months after occupancy.

CMI's High Performance Tenant Demonstration Project portfolio is comprised of several high-impact tenants, including Bloomberg LP;1 a number of major tenants at the Empire State Building; and Reed Smith in Philadelphia. CMI will prepare a case study for each project documenting the value analysis process, the tenant's selection of performance measures, and the economic return on the tenant's investment in those measures. We expect to add a few other select tenant build-out projects to the portfolio.

By broadly publicizing this portfolio of case studies, a How-to-Guide detailing the entire process, and the tools we develop to help analyze the value of energy performance measures, CMI's goal is to make high performance tenant build-outs standard practice for the commercial real estate industry.

The CMI team will continue to refine the process to address building industry feedback, and as we complete additional tenant demonstration projects in the upcoming year. CMI looks forward to hearing from those in the field, and we thank you for helping transform the energy efficiency market and accelerate demand for higher performing and more comfortable commercial office spaces and buildings.

The core mission of the Center for Market Innovation (CMI) is to expand the impact of the Natural Resources Defense Council (NRDC) by creating market conditions that will redirect capital flows toward sustainable uses. We believe that engaging mainstream capital is a critical component in achieving our common goals. We do so by engaging with the business community to articulate and implement sustainable value propositions, with a current focus on energy efficiency, water management, and regenerative agriculture.

Project Partners and Funders

Empire State Realty Trust The Goldman Sachs Foundation The Rockefeller Foundation
  1. Bloomberg LP is located at 120 Park Avenue in Manhattan, New York.
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