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), has added several enhancements to the Green Lease Leaders recognition program. Launched in 2014, this program recognizes landlords and tenants in the commercial office, retail, and industrial sectors that are addressing improvements for building energy and water use through the lease clauses and corporate guidelines they utilize. These developments are helping to set a new standard for leasing to tackle long-standing barriers to high-performance buildings that are leased.
Since IMT and DOE established the program, forward-thinking organizations collectively representing over 1.3 billion square feet of commercial building space in the U.S. have been named Green Lease Leaders. In October 2017, the program has taken a leap forward by announcing: revised green leasing criteria; Gold and Silver recognition levels; a redesigned website that includes an online lease assessment tool; and new resources including reference guides with sample lease language and templates for free download.
“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,” said Cliff Majersik, Executive Director for IMT. “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 leases (also called “energy-aligned” or “high-performance”) have the potential to save the U.S. office market $3.3 billion annually and cut energy consumption by up to 22% in leased buildings. However, typical leasing practices deter landlords and tenants from investing in cost-effective energy and water efficiency solutions. Green Lease Leaders is designed to shine a spotlight on the 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.
“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,” said Holly Carr, energy technology program specialist for DOE’s Office of Energy Efficiency and Renewable Energy. “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.”
In Progress: Applications For 2018 Green Lease Leaders
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. For the 2018 program, a new Innovation in Leasing credit encourages organizations 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. Those interested in receiving one-on-one guidance for greening a lease and/or support for becoming a Green Lease Leader can contact IMT and DOE staff here.
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.
“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,” said Sara Neff, senior vice president of Kilroy Realty Corporation. “Our green leases are fundamental 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.”
“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,” said Jacquelynn Henke, sustainability & innovation Director of TD Bank. “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.”