What Color Is Your Lease? - Beyond the Grid

Green leases offer sustainable and financial benefits for landlords and tenants alike

By Ina Drosu

In an environment where the ecological lobby is prevalent, and the general economic downturn begs for practical innovation that reduces operating costs, green leases are steadily gaining the interest of landlords and tenants. Profitability is key to survival of commercial ventures; without it, loftier concerns fly out the window. What better way to harness broad improvement potentials than a lease structured as economic driver accommodating comprehensive environmental regulations and allowing for necessary changes over time?

According to a study done by CRD&MI, energy costs are 29 percent of landlord
operating costs while less than one percent is paid for by tenants.

Alan Whitson, president of Corporate Realty, Design & Management Institute, created a model green lease to serve as more than a “token gesture to sustainability.” The lease provides incentives for landlords to build cost-effective peak-performance buildings that address energy and water efficiency, emission reduction, and waste minimization. According to a study done by CRD&MI, energy costs are 29 percent of a building’s operating costs while less than one percent is paid for by tenants. Most commercial leases leave energy efficiency out of the equation. He adds, “in a booming market it’s easy to be green, but now, savvy people realize it is part of an economic strategy to improve performance and productivity.”

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