Empire State Building retrofit slashes $2.3M in costs

June 24, 2013 05:30PM

The Empire State Building’s $550 million retrofit, designed to make the building more energy efficient, is already churning out savings, Crain’s reported.

The retrofit, which included installing new lighting and windows, modernizing boilers and insulating radiators, saved the Art Deco landmark $2.3 million last year and $2.4 million in 2011, beating expectations by 4 and 5 percent, respectfully. The full upgrades are to be completed within four years and are expected to save the building $4.4 million in energy costs annually — about 38 percent of the building’s current bill.

Occupancy rates are also seeing a boost thanks to the building’s new green credentials, drawing tenants such as LinkedIn, Coty and Shutterstock.

“The energy efficiency was a huge component of our success in repositioning the building,” Anthony Malkin, president of Malkin Properties, which controls the building, told Crain’s. “There’s a savings in cost to the building and to our tenants.”

The owners of the Empire State Building secured the necessary votes to form a publicly traded real estate investment trust in May. Would-be shareholders sued to block the initial public offering, a case that has since been settled for $55 million. Malkin, one of the largest investors in the portfolio, is the face of the planned REIT, dubbed Empire State Realty Trust. The REIT has an estimated value of $4.2 billion.

Malkin Properties has made energy retrofits to 13 other commercial buildings in the New York metro area, and the high visibility of the Empire State Building is expected to influence other commercial landlords to pursue similar energy-saving measures.[Crain’s]Julie Strickland