Landlord-Tenant Energy Partnership Improves Efficiency, Fosters Relationships

Achieving a 20 percent reduction in energy use in America’s commercial, retail, industrial, and office buildings would save $5 billion annually. However, lack of awareness and low demand for energy-efficient spaces is preventing thousands of companies from unlocking this potential. Recognizing this, the Institute for Market Transformation (IMT), the Retail Industry Leaders Association (RILA), and the International Council of Shopping Centers (ICSC) are launching the Landlord-Tenant Energy Partnership, a coordinated national effort to reduce energy use across billions of square feet of leased space.
“Tenants use over half the energy consumed in leased spaces across the U.S. Often this energy is wasted by inefficient operations and equipment—so much so that their combined potential energy savings could be equivalent to taking the country of Mexico off the grid,” states Adam Sledd, director of market engagement at IMT.
The Landlord-Tenant Energy Partnership will build upon standards for energy-aligned leasing (or “green leasing”) practices established by IMT and the U.S. Department of Energy’s Green Lease Leaders program; improve the tenant site selection process; increase transparency of tenant utility consumption in office and retail buildings; promote adoption of energy-efficient build-out methods; and increase landlord-tenant interaction to enable energy-saving efforts throughout the course of a tenant’s lease. All of these practices position tenants and landlords to make informed business decisions regarding their operations and leased space.
“Energy management within leased stores continues to be a challenge for many retailers. This partnership is an opportunity to engage all relevant parties to overcome these obstacles as an industry and establish leading practices moving forward,” says Erin Hiatt, senior manager, sustainability and compliance at RILA. “Our goal for this partnership is to help both tenants and landlords work together to unlock energy-saving and cost-saving opportunities. IMT and ICSC are strategic partners as we launch these efforts and we look forward to growing the program together.”
Announced at RILA’s annual Retail Sustainability & Environmental Compliance conference, the partnership builds upon the founding organizations’ relationships with some of the country’s tenants, building owners, real estate brokers, investors, and energy service companies. It will also coordinate with the U.S. Environmental Protection Agency’s ENERGY STAR program and U.S. Department of Energy’s upcoming tenant-focused initiative. 
“ICSC is committed to helping its members advance an economically prosperous and environmentally sustainable future, and the Landlord-Tenant Energy Partnership will help identify strategies to create positive change within the retail real estate industry,” says Abigail Jagoda, director, public policy and best practices, ICSC. “As part of this effort, participants will seek best practices and public policy that accelerates the industry’s ongoing energy efficiency and sustainability gains.”

How the Landlord-Tenant Energy Partnership Works

To kick off its efforts, the partnership has established an advisory group of representatives from some of the companies with national real estate portfolios, including CBRE, Kimco Realty Corp., and Nike. (The current list of advisors can be found here.)
“CBRE sees landlord-tenant collaboration on energy efficiency as a way to improve whole-building energy performance across our portfolio and to reach our corporate sustainability and carbon reduction goals,” says Lisa Colicchio, director of corporate responsibility for CBRE.  “I look forward to working with IMT, RILA, and ICSC to bolster this dynamic in the real estate sector and capture associated returns on our investments.” 
“Kimco has invested in sustainability initiatives,” states Will Teichman, senior director of strategic operations at Kimco Realty Corp. “Our participation in the Landlord-Tenant Energy Partnership continues our practice of partnering with commercial owners, NGOs, utilities, and government authorities to identify market barriers to implementing programs and policies that not only improve the efficiency of our properties but also foster partnerships with tenants and bring related benefits to their communities.”
Participants will receive access to one-on-one guidance on implementing energy efficiency in leased spaces, resources such as model lease language and build-out specifications, insights into landlord-tenant issues such as data sharing efforts, and access to pilot projects and business models.
“The Landlord-Tenant Energy Partnership offers a path for businesses to tap into the efficiency benefits that are possible with today’s technology and financing,” says Audi Banny, senior manager of market engagement at IMT and former director of corporate sustainability initiatives at the Estée Lauder Co. Inc. “We look forward to working with participants to drive this collective change.”

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