How do I Green a Lease?
The Green Lease Leaders program recognizes that there are many steps in the leasing process and that many stakeholders are involved in order for the leasing process to be successful.
We are focused on providing resources that address the 4 most critical steps that impact the ability to do high performance buildings in the long-term: site selection, lease negotiations, tenant fit-out, and tenant operations. In order for green leasing to be integrated into a portfolio and to become standard practice, green leasing must be evaluated during site selection, included and executed in lease negotiations, and operationalized in the tenant fit-out and tenant operations phase. Throughout these steps, different stakeholders are coming in to drive the process and provide expertise. Our goal is for each stakeholder involved to understand how the green lease affects their leasing stage, and be able to carry out the building owner or tenant’s environmental and social goals that were started in the lease.
Explore the leasing phases below to learn how to integrate green leasing best practices into each step of the leasing journey.
Site Selection
Tenant/Broker team looks for and evaluates different buildings to select a space. Owner/Broker markets building specifications to prospective tenants.
Lease Negotiations
Building Owner, Tenant, Broker, and Attorney offer and negotiate a Letter of Intent document followed by a Lease for a final, executed Lease.
Tenant Fit-Out
Tenant designs, constructs, and/or adapts the space to their preferences and needs.
Tenant Operations
Tenant manages and controls the use of the space. This includes energy use, water use, performance targets, and social impact targets.
Site Selection
Recommendations:
- Tenant/Broker should ask for whole-building performance metrics, energy use intensity, and whole-building capital improvement plans during the evaluation process
- Building Owner/Broker should provide energy use details, carbon reduction goals, social impact programs, and other efficiency rating program awards like WELL or LEED to prospective tenants as amenities
- Consultants and Brokers should recommend buildings with higher energy efficiency as an attractive amenity for the reduced operating costs and associated benefits on occupant health, productivity, and any stated environmental, social, governance (ESG) goals.
Lease Negotiations & Documentation
Recommendations:
- Tenant, Building Owner, Broker, and Attorneys should include pursuit of sustainability and carbon reduction goals and any related expectations and/or requirements in its Letter of Intent
- Tenant, Building Owner, Broker, and Attorneys should include green lease clauses and/or performance-based lease clauses in the lease that are aligned with stated sustainability and carbon reduction goals
- Tenant and Building Owner should include the pursuit of local incentives for energy-efficiency and renewable energy in the letter of intent and lease
- Tenant and/or Building Owner may retain subject matter experts for advanced technical assistance needed for the fit out and operations of the space.
- Model performance based lease template
- Green lease language reference guide
Tenant Fit-out
Recommendations:
- Building Owner should maintain energy efficiency operational procedures as the Tenant develops, constructs, or adapts the space.
- Tenant and Building Owner should apply for and utilize incentives such as rebates or tax credit programs offered federally and locally to fund energy efficiency improvements to the space.
- Consultants and Building Manager should ensure energy efficiency measures are being integrated and advancing towards performance goals.
Tenant Operations
Recommendations:
- Consultants and Building Manager should define operational procedures that prioritize energy efficiency with Tenant and Building Owner.
- Tenants and Building Manager should track and report on utility data, such as energy and water, and the benefits of energy efficiency with the Building Owner.
- Tenant and Building Manager should work together to identify systems at the end of their lifespan that can be updated for more energy efficient versions and identify additional tenant practices to improve energy efficiency.
- View How to Choose the Right Energy Management Information System from IMT to select the EMIS for a portfolio or a single building.