How USL Helps CRE Landlords And Tenants Navigate NYC's Energy Regulations And Achieve Their Goals

The remainder of 2024 will be a critical time in the effort to reduce New York City buildings’ carbon footprints. That is because Local Law 88 requires a majority of commercial buildings larger than 25K SF to install submeters and upgrade to more energy-efficient lighting controls by Jan. 1, 2025. 

Also, as part of Local Law 97, buildings must submit a report detailing their energy usage by May 1, 2025, or face significant penalties.

These might be tall orders for some building owners, but adopting sustainable practices and monitoring energy usage don’t have to be solo efforts. Owners can partner with energy-efficiency and sustainability firms to help them make these reductions.

NYC-based USL Technology creates data-driven strategies to help landlords and tenants comply with these local laws and integrate lasting sustainability measures and maintenance into their building operations.

USL Technology founder and CEO Fatou Jabbie said the company’s vision for the future of commercial real estate focuses on long-term sustainability and compliance with evolving regulation, enabling owners and tenants to be ready for LL88 and LL97 in 2025 and beyond.

She said that while only buildings larger than 25K SF are required to implement these changes, buildings of all sizes would benefit from them.

Jabbie walked Bisnow through how buildings can make upgrades that align with LL88 and LL97, the benefits of green leases, and how buildings can take advantage of USL’s distinct approach to energy efficiency.

Bisnow: What energy upgrades and initiatives will maximize compliance with LL88 and LL97 while cutting costs? 

Jabbie: An energy management system that operates in real time helps landlords stay informed about their building’s energy usage and make necessary upgrades. This not only aligns with reporting requirements but continuously provides visibility into the building’s health and operations.

Landlords can cut down on energy usage and comply with LL88 by switching to LED lighting and installing lighting controls like dimmers and motion sensors. Smart thermostats help control heating and cooling, while insulating and air-sealing windows reduce heating and cooling loads. High-efficiency heating and cooling systems optimize ventilation and control moisture.

With regular audits and inspections, landlords can detect if the building is out of compliance and help landlords make corrections. They can also use data analytics to track energy consumption patterns and make decisions about upgrades and maintenance. Continuous monitoring and real-time adjustments ensure buildings remain compliant and operate efficiently.

Bisnow: How can landlords use green leases to communicate energy goals to tenants? 

Jabbie: A green lease is an agreement to align landlords and tenants on water- and energy-efficient solutions. It outlines responsibilities for upgrades and indicates cost savings from reduced energy use.

Green leases can be integrated when signing, renewing or amending a lease. Once lease terms are finalized by the landlord’s and the tenant’s attorneys, both parties will know their obligations. USL can assist with energy-efficiency upgrades and engineering work as well as provide ongoing support and resources to help achieve energy goals.

Engaging tenants in energy-efficiency initiatives and promoting green leasing practices also fosters collaboration and sustainability. Landlords can host workshops to educate tenants on energy-efficient practices and offer incentives for their participation. They can also invite tenants to share ideas and concerns about the building’s energy goals.

Shared savings agreements align financial interests, which incentivizes making energy-efficiency improvements. Including these terms in green leases ensures both parties share savings and responsibilities.

Bisnow: What are the steps for landlords who want to implement a green lease?

Jabbie: Once all stakeholders decide to move forward with a green lease, the first step is to create a letter of intent with the tenant. The LOI should outline sustainability goals, define obligations for energy-efficiency improvements and include green lease provisions such as energy performance standards and shared savings agreements. Engaging brokers, legal advisers and energy consultancies like USL ensures the LOI and lease agreements are comprehensive and legally sound.

During lease negotiations, landlords should introduce green provisions early and discuss financial incentives from Con Edison and NYSERDA. Once the language is established, USL can assist with structuring the green lease, conducting energy audits and verifying cost savings. After finalizing the lease, landlords can proceed with energy audits, implement tailored solutions and set up technology for ongoing monitoring.

This approach provides clarity and alignment on sustainability goals, streamlines negotiations and ensures early compliance with LL97.

Bisnow: How can landlords use USL’s data collection and analysis to reduce their building’s energy usage? What makes this approach distinctive?

Jabbie: USL’s processes for data collection and analysis are distinguished by our use of advanced sensors and Internet of Things devices to gather real-time data on energy consumption, indoor environmental quality and equipment performance, ensuring high accuracy. Using artificial intelligence and machine learning, the platform identifies performance patterns, predicts future energy usage and detects anomalies.

The data is compiled into user-friendly dashboards so that landlords can visualize key metrics and make informed decisions about necessary changes. USL conducts detailed energy audits and benchmarking, making recommendations on what should be prioritized and creating return on investment calculations for energy-efficiency improvements.

USL supports implementation by selecting technologies, verifying system performance and offering continuous monitoring. This approach ensures reduced on-site visits, fosters compliance with regulations like LL88 and LL97, lowers carbon footprint and improves tenant satisfaction through enhanced comfort and lower utility costs.

Bisnow: What financial incentives and return on investment can landlords expect from implementing USL’s recommended energy upgrades? 

Jabbie: Building projects focused on enhancing energy efficiency achieve a 20% to 30% yearly return on investment. By making these upgrades, which include ensuring that buildings can withstand climate change, landlords can significantly cut down on energy usage and reduce utility bills. Compliance with local laws helps avoid fines and attracts environmentally conscious tenants, leading to higher occupancies and rental rates.

USL ensures that all tenants, especially those in underserved communities, benefit from energy upgrades. It assesses each building’s needs, offers support for integration and maintenance, and collects tenant feedback to help set sustainability goals. Upgrades are rolled out in phases to minimize disruption.

USL also holds green-lease workshops and meetings with stakeholders and tenants to discuss upcoming energy projects. This inclusive approach fosters collaboration, ensuring equitable access to energy-efficiency improvements and promoting sustainable building practices. Enhanced indoor environmental quality improves tenant comfort and productivity, leading to higher satisfaction and retention.

Landlords interested in exploring the benefits of green leases can also participate in USL’s green-lease pilot program. This program offers a structured approach to implementing green leases, starting with an initial assessment and followed by tailored recommendations and phased upgrades. By participating in the pilot, landlords can gain firsthand experience with the benefits of green leases and receive ongoing support from USL’s team of experts.

By implementing these strategies, we ensure that energy-efficiency improvements are not only effective but also equitable and sustainable, benefiting both landlords and commercial tenants across diverse communities.

This article was produced in collaboration between USL Technology and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.