The Institute for Market Transformation (IMT) and the U.S. Department of Energy’s Better Buildings Alliance (DOE BBA) kicked off the 2015 Green Lease Leaders recognition program earlier this year. Commercial brokers, landlords, and tenants across the globe successfully introducing energy-efficiency practices into their leases—to help all parties save money, enhance operations and conserve resources—are strongly encouraged to apply. Recipients will join the last year’s diverse group of winners in receiving the “Green Lease Leader” designation and will be given an official seal for placement within their buildings and for use in their sustainability profiles.
Despite today’s advancements in technology and available energy-saving tools, many leasing agents, building managers and firms still face an uphill battle when it comes to improving the energy performance of their properties. A communication breakdown persists between landlords and tenants regarding power and water usage, and tensions often arise because of responsibilities and cost-sharing arrangements for improvements. Even landlords and tenants who have the desire to work together and integrate sustainability into their lease clauses seem to often speak different languages.
Fortunately, a growing number of companies are tackling this issue head-on. With support from leading real estate practitioners, the Green Lease Leaders program highlights innovative leasing practices such as effective ways to share the costs of energy-saving improvements with tenants and increase energy data transparency. It also bolsters those who are already deploying replicable solutions to improve efficiency, comfort, and savings—helping other companies to benchmark and determine what language is appropriate to add to their lease.
“Green leasing is vital to the commercial real estate sector because it further closes the gap between design and actual performance when it comes to energy efficiency. An effective green lease gives both landlord and tenant the blueprint needed for working together to ensure a building is highly efficient and is operated and occupied sustainably,” says Cliff Majersik, executive director for IMT. “Last year’s Green Lease Leaders demonstrated how some of the commercial real estate companies in the world are deploying these practices and we expect to see that trend continue.”
Real estate practitioners are seeing that sustainability-focused changes to standard lease language not only help reduce electricity and water consumption and improves tenant comfort, but they also allow for the better control over operating expenses while minimizing waste. One of last year’s Green Lease Leaders, Jamestown L.P., a national, vertically-integrated real estate management company that owns more than $7 billion in assets, identified green leasing as an essential tool for seizing energy efficiency opportunities. In order to roll out energy efficiency standards across its buildings nationwide, Jamestown worked with each regional office to ensure asset managers and leasing agents understood the benefits of green clauses, and were equipped to apply energy efficiency principles to their local markets.
“As we saw with the inaugural Green Lease Leaders, real estate companies that engage tenants on energy efficiency during lease negotiations create more profitable portfolios, better relationships with tenants, and stronger sustainability profiles. I look forward to seeing what innovative and intelligent solutions this year’s leaders have ushered forward,” says Kristen Taddonio, manager of DOE’s Better Buildings Alliance.
“Commercial brokers play a vital role in the real estate transaction, serving as the primary conduit between commercial tenants and landlords,” says Andrew C. Florance, CoStar Group founder and CEO. “We support the goals of the Green Lease Leaders program, and believe it will provide brokers an opportunity to earn greater recognition for their important work in facilitating sustainable tenant-landlord relationships in the market.”
“Unico is proud to have been selected in the 2014 inaugural group of Green Lease Leaders who are challenging the status quo to create a sustainable built environment,” says Brett Phillips, director of sustainability for Unico Properties, the Seattle-based real estate investor and operator with a 12-million-square-foot portfolio in the western U.S. “Transforming our industry requires innovative thinking and nowhere is change more pressing than in revising the traditional commercial lease. At Unico, we use the green lease as a catalyst to design, build, and operate high performing real estate—financially and environmentally. With green leases, we deliver triple-bottom-line returns that benefit our investors, tenants and the environment. We look forward to the program’s growth to help the industry realize the benefits of integrating sustainable best practices in the built environment.”
Last year’s chosen Green Lease Leaders own or manage 400 million square feet of combined property and have buildings on four different continents. Their green leasing strategies have been applied across nearly every major property type, including office, retail space and manufacturing sites. This year, the broker portion of the application was overhauled to make the program more relevant for the individuals negotiating green leases.
To earn a Green Lease Leader designation, landlord and tenant applicants must:
- Have signed and executed at least two green leases in their portfolio.
- Submit a narrative description of the applicant’s internal green leasing initiative, along with a completed application and a small entry fee.
For individual brokers or brokerage teams, the application requires a mix of sustainability education and leasing energy efficient spaces, with applicants earning points for actions such as conducting sustainability education sessions and negotiating leases in LEED certified buildings.
The program application can be found at www.greenleaseleaders.com and the 2015 application cycle will run until April 8. The 2015 group of recognized firms and brokers will be announced at DOE’s Better Buildings Summit in Washington D.C. on May 27, 2015.
The 2014 Green Lease Leaders were: