Sustainability has become an increasingly important factor for tenants when choosing to lease office spaces.
In 2013, 67% of business owners
in a survey reported caring about sustainability more than they had three years prior.
There are many things landlords can do to make their properties attractive to tenants who are interested in sustainability. One of the best methods is to advertise green leasing.
Defining Green Leases
Green leases are lease agreements between tenants and landlords where landlords agree to hold the building to certain conditions, particularly focused on sustainability. The parameters of the lease may include energy standards, environmental considerations, cleaning practices, and the amount of fresh air being used in the building at all times.
When a landlord uses a green lease, tenants can rely on key sustainability factors in the building to be maintained.
Why Green Leases Will Help You Find Good Tenants
1. Tenants Recognize LEED and ENERGY STAR Certifications
Tenants who consider energy efficiency and sustainability to be important factors when choosing office space may not know exactly what to look for. LEED and ENERGY STAR are recognized. In a market with many options, marketing these certifications puts your building into a tier above those without one of those certifications. Even if prospective tenants do not know exactly why your building is sustainable, they will at least know it is recognized as a green building, and will believe it is built and will be operated at a higher standard as a result.
2. Tenants Know Green Leases Can Increase Productivity and Better Quality of Life Around the Office
Green leases offer increased comfort to tenants, ranging from fresh air to access to daylighting and a comfortable temperature. When tenants look to create a new space, they often seek to create an environment where their employees will be more comfortable and healthier (and thus more productive).
3. Tenants Can Enhance Their Own Brand
When tenants occupy energy efficient buildings they can publicize that they are being both good stewards for their money (particularly if they are a nonprofit or corporation with stock holders) and of the environment. There are many competitions, such as the Smarter DC Challenge
where they can gain recognition for their energy conservation efforts.
How to Implement Green Leases with Submetering
Oftentimes, submetering is required by tenants before they sign a green lease. Additionally, submetering is a requirement for LEED v4 certification. Submeters are beneficial for both tenants and landlords.
For tenants, submetering allows them to pay only for their own consumption
, instead of their neighbors’. It also gives them visibility for how effective any of their energy conservation measures are. When tenants directly benefit from installing energy efficient light bulbs or using less heat in the winter, they are incentivised to put those practices in place. Then, the landlord benefits by having a greener space and longer lasting equipment that is treated with more care.
“When tenants have submetered their space, they are more incentivized to use less energy, and will install appropriate technology or include company-wide policies to institute such change. Once they make these changes, landlords also benefit, as the actions of the tenants to save energy result in higher Energy Star Scores for the building.”
-Sally Wilson, LEED Fellow, Newmark Grubb Knight Frank
So if your next tenant requests a green lease, you should consider taking on the new challenge. Plus, if you start to advertize that you offer green leasing you will find tenants who want to be engaged and will treat your building with care.