How New York Is Supporting Commercial Real Estate’s Decarbonization Journey

If you’re a commercial building owner who is not thinking about building decarbonization, rest assured that someone else is, including state and local governments. 

In New York City, most buildings over 25K SF must meet new energy efficiency and greenhouse gas emissions limits in 2024, with tougher limits taking effect in 2030. The city also has prohibited the installation of fossil fuel equipment in new buildings up to seven stories tall, and the prohibition will apply to all new buildings by 2029.

As a result of these mandates and the state's Climate Leadership and Community Protection Act, commercial building owners need to accelerate their decarbonization efforts to meet limits that will become increasingly stringent throughout the decade, said Todd Baldyga, director of industrial and agriculture market development for the New York State Energy Research and Development Authority.

But it’s not just regulators who are applying pressure. Tenants, employees and investors are increasingly asking what their buildings are doing to reduce carbon emissions, Baldyga said.

“Building owners are getting pressured from multiple stakeholders to advance sustainability in their operations,” he said. “It behooves them to embrace decarbonization.”

In response, NYSERDA has created multiple resources to help commercial buildings decarbonize, Baldyga said. These include the Carbon Neutral Buildings Roadmap and the Empire Building Playbook: An Owner’s Guide to Low-Carbon Retrofits. Baldyga said technical and some financial assistance is also available through the state to help buildings achieve carbon neutrality.

“NYSERDA listens to the market to learn what its needs are — the technical and cost barriers and the pain points — and then we create programs and solutions to meet their needs,” he said. “We want to be there at the front end with technical and engineering support to help them on their decarbonization journey.” 

Bisnow spoke with Baldyga about what the decarbonization journey can look like for building owners and how NYSERDA offers help along the way.

New York’s Carbon Neutral Buildings Roadmap lists the key attributes of a carbon-neutral building, including the maximization of energy efficiency, elimination of fossil fuel combustion and production and procurement of zero-emission electricity. 

But that doesn’t mean decarbonization is a one-size-fits-all process. NYSERDA recommends a phased approach that is tailored to a building’s unique needs. 

The important thing, Baldyga added, is that property owners begin the process now.

“If a building owner hasn’t yet started their decarbonization strategy, the best thing is to begin with a technical analysis and building systems inventory to gather utility data and assess energy performance,” he said. “From that, they can start to map out the future needs of the building and calculate their own ROI to build their strategy out.”

No building can decarbonize overnight. The process can take several years or decades, which is why Baldyga said the owner should first look for “quick wins”: operational improvements they can make in the near term that won’t require a large capital investment.

“The idea is to get your first wins toward achieving partial electrification and then consider more advanced strategies like renewables that can eventually get you to full electrification,” he said. “Every building will be different, but if you take a phased, tailored approach, you'll be successful.”

Decarbonization might seem like a daunting and unfamiliar challenge to owners and operators of, for example, an office building whose biggest daily concern is attracting and retaining tenants in this era of remote work. Compounding the problem, most buildings don’t have in-house decarbonization experts.

But Baldyga said NYSERDA can help.

The state’s Flexible Technical Assistance Program keeps a group of engineering firms on retainer that are qualified to perform building energy efficiency assessments. 

“For somebody who is starting the journey, FlexTech provides cost-share engineering support to help them complete an energy study and build a decarbonization plan,” he said. 

Another NYSERDA cost-sharing initiative, the On-Site Energy Manager Program, embeds an engineering consultant with a building’s staff to act as their on-site energy manager.

“We've done this successfully with industrial and commercial sites to help them come up with a decarbonization plan,” Baldyga said. “Some of the engineers are even on-site 40 hours a week, collaborating with building management to lower their energy use and be more efficient.”

The Empire Building Challenge will help fund best-in-class demonstration projects that can be replicated in other buildings. EBC building partners currently represent more than 20% of commercial office space in New York City, according to NYSERDA.

The bottom line is that building owners do not have to fend for themselves in achieving compliance, Baldyga said. He pointed to building owners who have made notable progress in decarbonizing their operations with assistance from NYSERDA.

These include Vornado Realty Trust, which has committed to reaching 100% carbon neutrality by 2030 at a 57-story Midtown skyscraper. Another building owner, Empire State Realty Trust, has been carbon neutral as a portfolio since January 2022. It is targeting net zero by 2030 for its namesake building and 2035 for its portfolio.

“This important partnership between New York State and commercial real estate leaders creates local jobs, drives technological innovation, improves our communities and stands as an example for climate-friendly retrofits,” Tony Malkin, ESRT chairman, president and CEO, said in a statement.

Baldyga said ESRT, Vornado and similar case studies can serve as real-world examples to other building owners of all sizes. 

“Some owners are going gangbusters on decarbonization and proving that it can be done,” he said. “Others will take a longer path to get there, but the sooner they start the better, and the technical guidance that NYSERDA offers can be critical to their success.”

This article was produced in collaboration between the New York State Energy Research and Development Authority 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.