For many NYC property managers, receiving a notice about Local Law 87 feels like getting another complex and expensive bill in the mail. It’s often viewed as a mandatory compliance task—a regulatory hurdle to clear and an expense to be minimized. But what if that perception is wrong? What if this required audit is actually a powerful roadmap to significant energy and operational cost reductions?

With the right strategic approach, the LL87 process can be transformed from a burden into a data-driven plan for improving your building’s bottom line. The potential for savings is not trivial. On average, ENERGY STAR certified buildings use 35% less energy than their typical counterparts. This isn’t just about environmental responsibility; it’s about smart financial management.

This guide provides a clear framework for leveraging your Local Law 87 audit. We’ll show you how to move beyond a simple compliance mindset and use this mandate to uncover predictable savings, enhance asset value, and gain a competitive advantage.

Key Takeaways

• Local Law 87 mandates a periodic energy audit and retro-commissioning for buildings over 50,000 sq. ft., with substantial financial penalties for non-compliance.
• The key to a positive return on investment is shifting from viewing LL87 as a compliance burden to seeing it as a strategic energy-saving opportunity.
• A thorough audit identifies specific Energy Conservation Measures (ECMs) in areas like HVAC and lighting that deliver measurable and predictable savings.
• Choosing an unbiased, equipment-agnostic partner is crucial for ensuring recommendations are based solely on your building’s financial performance.

Understanding Local Law 87: The Mandate and the Stakes

Before you can find the opportunity, you need to understand the requirement. In simple terms, Local Law 87 is a mandate for periodic energy audits and retro-commissioning for all NYC buildings over 50,000 square feet. According to the NYC Department of Buildings, the law’s primary goal is to optimize building systems and reduce energy consumption across the city.

The law has two core components that work together:

• Energy Audit: This is a systematic analysis of your building’s energy usage. The audit inspects base building systems—like heating, cooling, ventilation, and lighting—to identify specific opportunities for improvement and calculate their potential savings.
• Retro-Commissioning: This is the process of fine-tuning your existing equipment and systems to ensure they are operating as designed. It’s not about replacing equipment, but rather optimizing what you already have to eliminate operational waste.

The stakes for inaction are high. Failing to submit your Energy Efficiency Report (EER) on time results in a first-year penalty, with additional fines for each subsequent year of non-compliance. These penalties are not a one-time issue; they compound, making avoidance a costly and unsustainable strategy.

The Strategic Shift: Viewing LL87 as an Investment, Not an Expense

The most common mistake building managers make is treating the LL87 audit report as a simple checkbox to be filed away with the Department of Buildings. This “compliance-only” mindset fulfills the legal requirement but leaves immense value on the table. The true power of the LL87 audit is in the data it provides.

Think of your Energy Efficiency Report not as a certificate of compliance, but as a customized, data-driven roadmap to reduce your operational costs. It shows you exactly where energy is being wasted and provides a clear plan of action, complete with cost estimates and projected savings for each recommended measure. This strategic shift turns a mandatory expense into a powerful tool for capital planning and boosting your building’s asset value.

To do this effectively, you need a partner who can manage the entire NYC Local Law 87 compliance process and improve your energy efficiency with an unbiased focus on maximizing your return on investment. This approach is proven to work. 

The EPA has found that buildings that were consistently benchmarked reduced energy use by an average of 2.4% per year, demonstrating that regular, data-driven reviews lead to sustained savings.

From Audit to Action: How LL87 Unlocks Tangible Savings

An LL87 audit goes beyond a surface-level inspection. It systematically uncovers the root causes of energy waste, identifying everything from major system inefficiencies to minor operational errors that add up over time. The result is a prioritized list of Energy Conservation Measures (ECMs) that can be implemented to generate real savings.

Common High-Impact Energy Conservation Measures (ECMs)

While every building is unique, most energy waste in large NYC properties occurs in a few key areas. A quality audit will pinpoint these opportunities, which often include:

• HVAC Optimization: As The U.S. Energy Information Administration notes that space heating is one of the largest single uses of energy in commercial buildings, this is often the area with the most significant savings potential. ECMs can range from calibrating sensors and sealing ductwork to upgrading boiler controls.
• Lighting Retrofits: Upgrading to modern LED lighting and installing occupancy sensors in common areas, stairwells, and back-of-house spaces can dramatically reduce electricity consumption.
• Building Envelope Improvements: The audit will identify air leaks and insulation deficiencies in windows, doors, and roofing that lead to wasted heating and cooling energy.
• Control System Upgrades: Ensuring your Building Management System (BMS) is programmed correctly for occupancy schedules and seasonal changes prevents systems from running unnecessarily.

These recommendations can range from low-cost operational changes (like adjusting temperature setpoints) to more significant capital investments (like a boiler replacement). A good EER will provide options for every budget.

Justifying the Investment: Calculating Your Potential ROI

A professional Energy Efficiency Report does more than just list problems; it provides the business case for the solutions. Each recommended ECM should come with three key pieces of financial data:

1. Estimated Implementation Cost: What it will take to get the work done.
2. Projected Annual Savings: The estimated reduction in your utility bills each year.
3. Simple Payback Period: How long it will take for the energy savings to pay for the initial investment.

With this data, you can easily calculate your potential return on investment and present a clear financial case to ownership. You can also highlight non-financial benefits that contribute to asset value, such as improved tenant comfort and satisfaction, increased equipment lifespan, and a better public image. This detailed analysis transforms the audit from a document that satisfies the DOB into a strategic capital planning tool for your entire organization.

Your Guide to Maximizing Value

The quality and usefulness of your LL87 audit depend entirely on the partner you choose. Your goal is to find a firm that shares your objective: using the audit to improve your building’s financial performance. Unfortunately, not all providers operate this way.

Compliance-Only vs. A True Savings Partner

A critical concern for property managers is that many firms use the audit process as a sales tool to push expensive equipment they sell or install, creating a clear conflict of interest. It’s vital to understand the difference between a basic provider and a true partner focused on your ROI.

An independent, unbiased partner is essential for receiving practical, cost-effective recommendations tailored to your building’s specific needs and your budget. Their only incentive is to find you the most efficient path to both compliance and savings.

Conclusion: Make Your Compliance a Competitive Advantage

Local Law 87 does not have to be just another regulatory hurdle to be cleared. When approached with the right mindset, it is a powerful opportunity to be seized—a chance to gain deep insight into your building’s performance and unlock significant, long-term operational savings.

The path to success is clear: acknowledge the legal requirement, adopt an investment-focused mindset, and select an expert, unbiased partner who is committed to your financial outcomes. The choice of your LL87 partner is the single most important decision in this process. It determines whether you simply file a report or fundamentally improve your building’s efficiency and value.

By strategically leveraging the LL87 process, you can lower operating costs, increase asset value, and turn a mandate into a genuine competitive advantage.