Green Lease Leaders

By on Dec 7, 2017 in News

Commercial building owners, tenants and brokers need the right tools to incorporate energy efficiency into leases.  A program called Green Lease Leaders stands ready to provide them.

Green Lease Leaders helps real estate practitioners create leases that promote collaboration on investments such as high-efficiency rooftop air handling units, lighting retrofits, water irrigation upgrades and solar panels.

The program was the subject of a recent webinar, “How to Become a Green Lease Leader: The Latest in High-Performance Leasing Practices and Recognition.”  Presenters included Holly Carr, a Department of Energy technology program specialist, Sara Neff, senior vice president of sustainability for Yardi client Kilroy Realty Corporation, and Alexandra Harry, program manager, market engagement for the Institute for Market Transformation (IMT).

Green Lease Leaders was developed in 2014 by IMT, a Washington, D.C. nonprofit and the webinar’s host, with support from the Energy Department’s Better Buildings Alliance.  IMT works to unlock building energy efficiency that it says could save the U.S. office market $3.3 billion annually and cut energy consumption by 22% in leased buildings. The program currently includes landlords, tenants and brokers who represent 1.3 billion square feet of commercial, industrial and retail space.

“Tenants and landlords share an obligation to understand how much energy their buildings use and jointly share the cost of upgrades as well as the resulting maintenance savings and best practices,” Carr said. “Benefits of green leasing include reducing utility bills by up to 51 cents per square foot, increased net operating income, reduced occupancy costs, increased occupant satisfaction, fewer greenhouse gas emissions and improved landlord-tenant communication and relationships.”

Along with defining new best practices for energy efficiency in buildings, the program also offers participants technical support, peer networking opportunities, tools for comparing current leases to Green Lease Leaders standards and other resources.

Successful applicants to Green Lease Leaders have formulated organizational best practices for energy efficiency, monitoring and sharing consumption data, carried out sustainability training, and instituted cost recovery for efficiency-related capital improvements.  The program recognizes organizations that have established foundational policies as well as those with verifiable achievements.

Neff described how Kilroy has made energy collaboration a non-negotiable part of every lease.  “Benchmarking requirement laws have been passed in San Francisco, Los Angeles, Seattle and other places.  This makes utility disclosure and cost recovery a critical part of lease language.  Working together to create green leases gets the landlord/tenant relationship off on the right foot.  The tenant knows going in that Kilroy cares about green leasing.  Our success in Green Lease Leaders also helps us celebrate our team internally.”

She added, “Green Lease Leaders changed the real estate industry by normalizing green leasing.  It also showed that green leasing isn’t that hard.  Kilroy is proud to be an original Green Lease Leaders participant in 2014.  The program’s whole point is saving energy, so everybody wins all around.  We’re happy to be a part of it.”

Green Lease Leaders is accepting applications for its next group of certified leaders until March 1, 2018. Learn more about the program. To apply these concepts to your business, read about how the Yardi Smart Energy Suite supports the energy management best practices that Green Lease Leaders promotes.