See if a green lease program is what you need to save energy and water — now with new Gold and Silver recognition and resources

by Brianna Crandall — November 15, 2017 — The Institute for Market Transformation (IMT), in collaboration with the U.S. Department of Energy’s (DOE) Better Buildings Alliance and the Lawrence Berkeley National Laboratory (LBNL), recently launched several enhancements to the Green Lease Leaders recognition program. Landlords and tenants recognized as Green Lease Leaders in the commercial office, retail, and industrial sectors are setting a new standard for leasing and breaking down long-standing barriers to high-performance buildings by addressing building energy and water use through lease clauses and corporate guidelines, says IMT.

Since IMT and DOE established the program in 2014, forward-thinking organizations collectively representing over 1.3 billion square feet of commercial building space in the US have been named Green Lease Leaders. Now the program is taking a leap forward by announcing revised green leasing criteria, Gold and Silver recognition levels, a redesigned Web site that includes an online lease assessment tool, and new resources including reference guides with sample lease language and templates for free download.

Cliff Majersik, executive director for IMT, stated:

Over the past four years, Green Lease Leaders have sent a strong signal to the real estate community that energy-aligned leasing is no longer a niche concept but a best practice that provides a competitive edge to both landlord and tenant companies. With strong support from DOE’s Better Buildings Alliance, LBNL, and industry leaders, IMT is excited to launch the newest phase of the Green Lease Leaders program to set high standards and to showcase the efforts innovative companies and real estate professionals are making to achieve new levels of building performance through green leasing.

According to a 2015 study by IMT, green (also called “energy-aligned” or “high-performance”) leases have the potential to save the US office market $3.3 billion annually and cut energy consumption by up to 22 percent in leased buildings. Unfortunately, typical leasing practices deter landlords and tenants from investing in cost-effective energy and water efficiency solutions. The Green Lease Leaders program shines the spotlight on landlords and tenants who eliminate these split incentives and galvanize efficiency investment through smarter leases that help lower utility costs, improve building operations, and achieve organizational sustainability goals.

Holly Carr, Energy Technology program specialist for DOE’s Office of Energy Efficiency and Renewable Energy (EERE) remarked:

Every lease negotiation presents an opportunity for landlords and tenants to implement mutually beneficial lease clauses and corporate practices that essentially automate energy, water, and cost savings over the life of a lease. Enhancements to leased spaces that often produce resource and cost savings, such as lighting and HVAC upgrades, can also improve occupant experience, contributing to increased tenant productivity, lower tenant turnover, and fewer vacancies.

Green Lease Leaders recognition

To receive Green Lease Leaders recognition, organizations must meet two prerequisites and earn five or more credits for best practices such as utility data tracking and sharing, cost recovery for efficiency-related capital improvements, sustainability training, and energy efficiency fit-out requirements for tenant spaces, among others. A new Innovation in Leasing credit encourages organizations to test out new ideas and share them with the market. The application period to be recognized in 2018 is now open and will close on March 1, 2018. To receive one-on-one guidance for greening your lease and/or support for becoming a Green Lease Leader, contact IMT and DOE staff.

In addition, the program now recognizes two levels of achievement — Silver and Gold. Silver recognition applauds the establishment of foundational policies and business practices that encourage reduced energy and water consumption in leased spaces. Gold recognition builds on Silver-level achievements and requires execution of leases and energy-efficient tenant fit-outs that are verified with an executed lease and other documentation. Participation in a case study is also required for Gold recognition. Commercial, industrial, and retail landlords and tenants, as well as transaction teams (a combination of landlord, tenants or brokers for a single real estate deal) are eligible for recognition.

Green Lease Leader success stories

Sara Neff, senior vice president of Kilroy Realty Corporation, stated about the program:

Kilroy Realty Company was proud to be named an inaugural Green Lease Leader in 2014, and we are excited to see the growth of the program as the market moves to meet sustainability expectations. Our green leases are fundamental [to] Kilroy’s sustainability programs because tenants play a significant role in the environmental performance of our buildings. Green leasing allows us to comply with California’s energy and water benchmarking regulations, and the capital-recovery language allows us to deploy wide-ranging efficiency investments. Tenants were excited to collaborate with us on our Green Lease Leaders Team Transaction award in 2017 because tenants also want lease language that promotes sustainability in their spaces.

Jacquelynn Henke, Sustainability and Innovation director of TD Ban, remarked

As one of the largest banks in North America, with a footprint of over 25 million square feet and more than 200 LEED-certified stores and corporate offices, TD Bank is committed to “green” buildings that are better for the environment and the communities that we serve. TD is proud to have received the Green Lease Leader designation in previous years for our efforts to reduce environmental impacts across our operational footprint by incorporating energy, water and waste management focused provisions into our leases. We are excited to apply again this year and join other environmental leaders to advance leases that support a transition to a low-carbon economy.

New Green Lease Leaders Web site, guides and resources

The redesigned Green Lease Leaders Web site includes a new lease assessment tool as well as streamlined recognition applications. New Green Lease Leaders Reference Guides for landlords and tenants provide details on each prerequisite and credit, example lease clause and corporate guideline language, and links to templates, trackers and resources. Participants commit to complete a lease assessment, receive access to one-on-one technical assistance for updating leasing practices, and support to apply for Green Lease Leader recognition. Participants also receive access to peer networking opportunities and Webinars.

For more information, click on the links below.