What Is A Green Lease And Why Does It Matter? A lease in which landlord and tenant agree to include sustainability concepts and assign costs and benefits of sustainability improvements. A green lease should: Align incentives so that both landlord and tenant benefit from energy efficiency Ensure that the lease helps each side meet corporate sustainability goals. Anticipate lease issues caused by new or potential regulations.

How can I get tenants to help cover the cost? The split incentive problem is best solved by changing the operating expense clause to allow for pass through of energy-saving capital expense projects. Each company uses different language and different methods for calculating the annual pass through amount.

Lease Changes Also Unlock Savings From Operations Change tenant build out requirements to enforce energy efficiency targets For renewables, change roof access rights and require tenants to purchase any power from landlord or landlord’s chosen provider Reduce the level of electrical service provided to tenant space and establish right to “clawback” unused portion--for example, 7 watts/psf to 3 watts/psf Consider sub-metering tenant spaces and billing directly for usage. Building rules and regulations section is a great tool – require tenants to comply with recycling program, daytime cleaning, new hours for HVAC operations

Green Leasing and GSA/Federal Clients In response to EISA 2007 and E.O , Website for GSA green lease requirements: Goal of annual updates to sustainability requirements Full service leases with T.I. built into base rent

With few exceptions, any lease over 10,000 square feet must be in an Energy Star labeled building (score of 75+) New or mostly vacant buildings have 18 months to earn Energy Star label Expect future changes to require more utility reporting from landlords. GSA Tenants and Green Leases

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