Case Detail

Case Summary

Reawakening the World’s Most Famous Office Building: Economics behind a Groundbreaking Energy Efficiency Retrofit

Case Number: 5-112-001, Year Published: 2012

HBS Number: KEL669

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Authors: Denise Akason; Helee Hillman

Key Concepts

Decision Making, Financial Analysis, Project Management, Real Estate, Social Responsibility

Abstract

This case highlights a recent and important type of new sustainability project for existing buildings commonly referred to as an integrated energy retrofit (IER) project. Anthony Malkin of Malkin Holdings, owner of the Empire State Building (ESB), acknowledged the importance of making the existing building stock, particularly in New York City, more energy efficient, as it comprises a large part of the real estate in most cities. Taking a bold leadership position, Malkin vowed to make the ESB the most energy-efficient, sustainable, “green” pre-war office building through an IER project that examined several facets of the building’s systems, operations, and tenant behaviors. In addition to making the ESB a green icon in Manhattan, Malkin also stated the importance of making the project transparent and economical so other pre-war buildings could copy the model. This case study examines in depth the process that Malkin Holdings underwent in attaining its goal of establishing the ESB as a leader in existing building sustainability.

Learning Objectives

After discussing and analyzing the case, students should be able to:

  • Understand how to balance costs and benefits associated with an IER project
  • Explain the benefits of green retrofitting to owners and tenants
  • Identify risks in high-profile, complex projects and recommend mitigation strategies

Number of Pages: 13

Extended Case Information

Teaching Areas: Real Estate

Teaching Note Available: Yes

Geographic: New York City, United States

Industry: Real Estate

Organization Name: Malkin Holdings and Jones Lang LaSalle

Organization Size: Medium

Decision Maker Position: President

Decision Maker Gender: Male

Year of Case: 2008