Landlord-Tenant Energy Partnership launched to unlock billions in energy savings

by Brianna Crandall — October 3, 2016 — Achieving a 20 percent reduction in energy use in America’s commercial, retail, industrial, and office buildings would save $5 billion annually, according to a U.S. Department of Energy feasibility study in April. However, lack of awareness and weak demand for energy-efficient spaces is preventing thousands of companies from unlocking this potential. Recognizing this, the nonprofit 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,” said 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 more-informed business decisions regarding their operations and leased space.

The goal of the Partnership is to help both tenants and landlords work together to unlock energy-saving and cost-saving opportunities. It offers a path for more businesses to tap into the many efficiency benefits that are possible with today’s advancements in technology and financing. Participants are expected to seek and encourage best practices and public policy that accelerate the industry’s ongoing energy efficiency and sustainability gains. The program is seen as a crucial way to improve whole-building energy performance across the participants’ portfolios and to reach their corporate sustainability and carbon reduction goals.

Announced at RILA’s annual Retail Sustainability & Environmental Compliance conference, the Partnership builds upon the founding organizations’ deep relationships with some of the country’s largest 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.

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 largest companies with national real estate portfolios, including CBRE, Kimco Realty Corp., and Nike. The Partnership also assisted EPA in convening a roundtable of experienced retailers on September 29 to discuss EPA’s upcoming tenant-focused recognition program.

Landlord-Tenant Energy Partnership participants will receive access to expert one-on-one guidance on implementing energy efficiency in leased spaces, best-in-class resources such as model lease language and build-out specifications, insights into leading landlord-tenant issues such as data sharing efforts, and access to innovative pilot projects and business models.