“Green Leasing” Tools Evolve from Infancy to Maturity in the Move to Greater Sustainability

October 23, 2011

The movement to greater sustainability in leased space took an important step forward following a recent Sustainability Roundtable, Inc. (SR Inc.) Member-Client webinar. The event presented research, case studies and introduced a newly developed “green leasing” toolkit that will enable corporate occupiers and owners/investors to achieve sustainable excellence.

The increased adoption of “green leases” is playing a transformational role to streamline the greening process. One of the centerpieces of the SR Inc. webinar detailed a more sustainable leasing strategy with seven fundamental preferences in decision making:

  1. Develop a portfolio-wide optimization strategy
  2. Integrate alternative workplace strategies
  3. Seek space in transportation adjacent existing buildings
  4. Weigh renewal options
  5. Weigh long-term lease options
  6. Seek buildings with a third-party certified commitment to sustainability
  7. Collaborate with landlords and tenants to advance greater sustainability

The most important aspect of the webinar was the introduction of a “Green Leasing” toolkit. These tools were introduced in DRAFT form pending SR Inc. Member-Client input/comment and are designed to be used by corporate directors of real estate and portfolio managers in the final phase of sustainable corporate real estate selection – the green lease itself. The tools within the toolkit included:

Site Selection Tool – outlines the steps to select a landlord with a commitment to sustainability and a site that has already achieved LEED, ENERGY STAR certification or a willingness to achieve sustainability certification.

Request for Proposal Tool – identifies tenant requirements for sustainability practices and distinguishes which green terms may be structured into the lease documents.

Letter of Intent Tool – highlights a tenant’s key green or sustainable lease issues and includes which green terms may be structured into the final lease document.

In addition to the green leasing guidance toolkit, SR Inc.’s breakthrough tools offer sample lease language for: 

  • LEED or Other Green Building Certification
  • Base Rent, Operating, and Capital Expenses
  • Utility Consumption and Metering
  • Data Collection and Information Sharing
  • Waste Stream Management, Recycling and Janitorial Services
  • Indoor Environmental Quality
  • Parking and Alternative Transportation
  • Environmentally Preferable Purchasing Policy
  • Construction Obligations and Tenant Improvements
  • Special Remedies for Violation of Green Lease Provisions

Overall, the toolkit emphasizes that a successful green lease is the result of a comprehensive negotiation process, in which sustainability practices are deliberately embedded in each phase of the lease lifecycle. The lease should reflect and memorialize the sustainability goals and obligations of both landlord and tenant as negotiated through prior documents.

The tools were developed in conjunction with SR Inc.’s Full Report – “More Sustainable Leased Space,” the “Global Sustainable Facilities Guidebook” for corporate occupiers and the “Global Guidebook on Sustainable Properties” for owners/investors.

In addition to the presentation of the SR Inc.’s newly developed toolkit there was a highly interactive discussion with comments from corporate executives at Apollo Group, AutoDesk, CapitalOne, Cisco, Intuit, McKesson, Mitre and Symantec as well as owner/occupier, Brandywine Realty Trust.

The movement to greater sustainability is evolving from its infancy with the leadership of innovative corporate and commercial real estate executives. And, now with tools developed by SR Inc. sustainability in leased space is becoming more cost effective and much easier to achieve.

If you would like to download the program presentation and an Executive Summary of “More Sustainable Leased Space” visit www.sustainround.com. To learn how SR Inc. can help organizations achieve greater sustainability portfolio-wide, please contact Larry Simpson, SR Inc.’s Executive Vice President of Advisory Services at larrysimpson@sustainround.com.

(The author is Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/aboutst/blog/)