Green Lease Leaders Launches Enhancements to Recognition Program, Website and Resources

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 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 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.

Since IMT and DOE established the program in 2014, organizations collectively representing over 1.3 billion square feet of commercial building space in the U.S. have been named Green Lease Leaders. The program is taking a leap forward by announcing revised criteria, two new levels of recognition, a redesigned website that includes an online lease assessment tool, and additional resources including reference guides with sample lease language and templates for download.

“Over the past four years, Green Lease Leaders have sent a signal to the real estate community that energy-aligned leasing is no longer a concept but a best practice that provides a competitive edge to both landlord and tenant companies,” says Cliff Majersik, executive director for IMT. “With support from DOE’s Better Buildings Alliance, LBNL, and industry leaders, IMT is excited to launch this phase of the Green Lease Leaders program to set standards and to showcase the efforts 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 U.S. 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. Green Lease Leaders shines 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,” says Holly Carr, energy technology program specialist for the DOE 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.”

How to Become a Green Lease Leader in 2018

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. Innovation in Leasing credit encourages organizations test out ideas and share them with the market. The application period to be recognized is now open. All applicants who wish to receive recognition in 2018 must submit their applications by March 1, 2018.

In addition, the program 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 Co. 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,” says Sara Neff, senior vice president of Kilroy Realty Corp. “Our green leases are fundamental to Kilroy sustainability programs because tenants play a 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 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.”

“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,” says 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.”

Green Lease Leaders website, guides, and resources

The redesigned Green Lease Leaders website includes a lease assessment tool, as well as 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, as well as support to apply for Green Lease Leader recognition, if desired. Participants also receive access to peer networking opportunities and webinars.

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