New NAIOP Study Sparks Controversy by Questioning Commercial Building Efficiency Goals

Hardly anything happens in this world without controversy. So maybe it’s no surprise that last month’s release of a major study about the feasibility of a commonly cited benchmark for energy efficiency in commercial buildings has raised a bit of a furor.

In the words of CoStar Group, the giant commercial real estate information company that serves the U.S. and U.K., the study “has sparked outrage among professionals who say its findings contradict a growing body of evidence based on the performance of many buildings that have achieved energy efficiency improvements of 30 percent or greater with negligible or no cost premiums.”

But let’s back up a bit. What exactly are we talking about here? We’re talking about a study published on February 24 by NAIOP, the Commercial Real Estate Development Association. In the words of the official press release, NAIOP set out to demonstrate “the levels of energy efficiency that standard office buildings can reach while remaining economically feasible.”


More specifically, NAIOP wanted “to determine if commercial development could achieve reduction targets of 30-50 percent above the ASHRAE 90.1-2004 standard — the benchmark often cited in legislation and other calls for mandatory reductions.” To conduct the study they used “a recently completed four-story, 95,000-square-foot, Class A office building as the prototype, the research modeled the prototype in three climate zones represented by Chicago, Ill.; Baltimore, Md.; and Newport Beach, Calif.”

(We’ll point out for our HVAC-oriented core audience that the study’s protocols naturally involved a great deal of HVAC-related stuff. You can read all about it in the full text of the study itself; see the link below.)

The ensuing controversy stems from the fact that the study’s final answer was an unequivocal “no.” NAIOP didn’t mince words when presenting their results:

Findings show that although significant energy efficiencies can be achieved (varying by climate zone), reaching a 30 percent reduction above the ASHRAE standard is not feasible using common design approaches and would exceed a 10-year payback. The study concluded that achieving a 50 percent reduction above the standard is not currently reachable [emphasis added].

They have devoted a full page at their Website to the study, and this includes not only a link to the full and freely downloadable study itself (pdf) but also an ongoing survey of press coverage. The titles of the articles themselves are fairly pointed, e.g., “Can ‘green’ buildings pass payback tests?” (ClimateWire; The New York Times online); “Are energy efficiency improvements unreachable?” (Consulting-Specifying Engineer); and “It’s NOT Easy Being a (Profitable) Green Building” (Mortgage Bankers Association).

NAIOP also includes a link to an article about the report that was published at Grist, the popular environmental news Website, and the title itself indicates the source of the controversy: “A hog in a tuxedo is still a hog.” The subtitle helpfully elucidates: “NAIOP releases disinformation study downplaying efficiency.”


With the Grist subtitle, the cat is out of the bag. For of course the issue of energy efficiency isn’t just a scientific matter these days but a sharply divisive political and philosophical one with serious implications not only for environmental health but for economic activity and government policy. As the ClimateWire report at the NYT online observes, the “study’s results make a marked contrast with the claims of efficiency enthusiasts, some of whom have claimed that new buildings can halve their energy use by next year — and use zero net energy within a few decades.” NAIOP has effectively plopped itself right down in the middle of this steamy mess.

Reading the various comments on both sides of the issue can be illuminating, or at least fascinating. The ClimateWire article quotes Jeffrey Harris, a vice president at the Alliance to Save Energy, who defends the goal and feasibility of achieving 30 percent above the ASHRAE code or even higher, and says, “There’s a lot of evidence on the other side [against NAIOP’s findings]. At the end of the day, you have a single study that has, like any, some shortcomings, and a large body on the other side. . . . I kind of compare it to the climate deniers.”

But the same article also quotes Ken Sagan, former owner of his own HVAC company and currently a building codes analyst for the National Association of Home Builders. Sagan calls the payback estimates in the NAIOP study “realistic” and says the study in general is “probably the best report I’ve seen that is factual and truthful.”


On the negative side, the most comprehensive criticism of the study yet to appear comes from a March 6 article published by CoStar Group (already quoted from above): “Experts Reject NAIOP Study, Citing Flawed Analysis.”

The article is essentially a detailed rebuttal of the entire study, which it says has “draw[n] sharp rebuke from experts in the energy efficiency, real estate and design and engineering fields.” CoStar Group cites critical comments offered by leaders at ASHRAE, ACEEE, Yudelson Associations, New Buildings Institute, P2S Engineering, and even the U.S. Green Buildings Council as proof of this widespread disagreement.

Of particular interest is their pointing out that the USGBC “openly disputed the study’s findings, issuing a statement that said LEED-certified buildings were ‘proof-positive that you can achieve 30% and greater energy efficiency using integrated design with little or no additional first costs.'”

The CoStar article also offers provocative words from Jerry Yudelson, who says the NAIOP study indicates a “lowest-cost first mentality. . . . Buildings are all designed for developers’ profit and not for the energy performance of the building over its lifetime. You have this dysfunctional system that everyone thinks is normal. . . . [Y]ou start to see the tension between the society’s interest in the whole life of the building versus the developer’s interest in getting their money back.”

Elsewhere, the aforementioned Grist commentary amplifies Yudelson’s and Costar Group’s concerns by calling the study “spurious” and describing it as the “first salvo” in a “disinformation campaign” that is “obviously meant to stall, confuse, and distort.”

Grist claims NAIOP intentionally slanted its findings by commissioning ConSol, the consultant firm that actually conducted the study, to “analyze an energy hog” and to do so according to a too-restrictive set of options. “NAIOP intentionally kept out of the analysis all the readily available low-cost, no-cost, and cost-savings options to reduce a building’s energy consumption,” Grist says. The bottom line, in their view, is quite damning: “This study is meant to confuse the public and stall meaningful legislation.”

This of course stands in sharp contrast to the words of NAIOP president Thomas J. Bisacquino, who argues (in the company’s press release) that “Identifying an energy reduction level that is both environmentally responsible and equitable to the developer is essential in protecting the prosperity of commercial real estate.” He says the new study “provides an unbiased insight into the energy targets practical to commercial development today.”


Stephen Del Percio at Green Real Estate Law Journal provides a really fine analysis of the whole situation, along with what is surely the most colorful title of any article examining the issue: “Green Building Industry Apoplectic Over NAIOP Commercial Energy Efficiency Study” (March 10). After briefly surveying the reactions to the study like we’ve done here, he offers a reasoned “bottom line” analysis for the present moment:

Regardless of the resulting furor, I think it is important to note the study’s results for a few reasons. First, ConSol used the Department of Energy’s EnergyPlus Version 2.2 simulation tool in order to derive its results. The study was based on a projection and not actual data. Second, other studies promulgated by some of the organizations that decried the NAIOP study have also been heavily criticized.

He concludes by averring that “While the results and merits of this particular study continue to be debated, what is clear [is] that building performance, contracts, and risk management will intersect significantly as we move forward during the course of 2009.”

As for our bottom line here at Just Venting, we tend to agree with Mr. Del Percio. The best advice at present is simply this: Stay tuned. The global push for green is only just getting started, and when it comes to controversies like the present one we’re inclined to revert to down-home speak by saying, “You ain’t seen nothin’ yet.”

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  • […] Christopher Schmittle posted a noteworthy aricle today onHere’s a small snippetThe ClimateWire article quotes Jeffrey Harris, a vice president at the Alliance to Save Energy, who defends the goal and feasibility of achieving 30 percent above the ASHRAE code or even higher, and says, “There’s a lot of evidence on … [ Y]ou start to see the tension between the society’s interest in the whole life of the building versus the developer’s interest in getting their money back.” Elsewhere, the aforementioned Grist commentary amplifies Yudelson’s and Costar … […]

    March 17, 2009

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