Have you ever thought (as I have) that there should be a third-party verification program for commercial green leasing efforts? Last month, the Institute for Market Transformation announced just that by launching its Green Lease Leaders Recognition Program. Developed in conjunction with the Department of Energy’s Better Buildings Alliance, the program aims to “recognize companies or brokerage teams that successfully implement green lease language into new or existing leases.” IMT is promoting the Green Lease Leader designation as the official recognition of its Green Lease Library – the excellent online green leasing resource which we’ve noted here at the Journal in the past.
The Green Lease Leaders Program is designed for commercial landlords, tenant companies, brokerage teams, and individual brokers. Applications are submitted online by the landlord, with the help of a landlord attorney if they seek their guidance and expertise, and require a narrative description of the applicant’s internal green leasing initiatives. These are then scored based on the number of green leasing-related accomplishments achieved. Critically, at least two signed and executed green leases must accompany the application to demonstrate that companies or broker teams applying for Green Lease Leader recognition have met the program’s Green Lease Standards, which are as follows:
Landlord & Broker Lease Requirements
Prerequisite: Tenant cost recovery clause that can be used for energy efficiency-related capital improvements.
This typically means that the list of operating expenses is expanded to include capital expenses intended to save energy, with the annual pass-through amount most often determined either by an amortization schedule or projected savings.
Minimum Additional Criteria (provisions must contain at least three of the following):
- Provision requiring tenant disclosure of monthly utility data to facilitate whole-building energy benchmarking.
- Minimum standards and/or tenant improvement specifications for energy efficiency. (For example, “Tenant improvements will conform to LEED-CI standards or better,” or “Tenants will install ENERGY STAR appliances only.” This may also cover items like lighting specification or available plug load watts per square foot.)
- Sustainable operations and maintenance rules and regulations. (Language should cover restricted HVAC weekend operating hours and the standard of operation for these HVAC units for optimal energy savings, there are services like the professional duct cleaning los angeles ca that can aid with the proper operation and maintenance of these units, janitorial services provided during daytime hours, tenants not allowed to bring in space heaters).
- Submetering of tenant spaces or separate metering of tenant plug load and equipment, including data centers. Ideally tenants are billed according to actual use rather than on a pro-rata basis.
- Landlord agrees to incorporate energy management best practices into building operations, such as lighting repair services, regular benchmarking, energy audits, or commissioning of building systems.
Tenant Lease Requirements
Prerequisite: Energy-efficient build-out specifications.
This means the tenant company specifies in the lease, usually in the tenant work letter, how the space will be constructed to be energy efficient beyond existing building codes.
Minimum additional criteria (provisions must contain at least three of the following):
- Agreement to disclose monthly utility data to the landlord for the purposes of whole-building energy benchmarking by the landlord.Request the landlord share the ENERGY STAR score of the building and/or other energy and waste usage information on a regular basis.
- Site selection language focused on leasing space that has met the requirements of third-party certification (such as ENERGY STAR, LEED, or other green building certification).
- Installation of submetering for tenant space or separate metering of tenant plug load and equipment.
- Encourage energy efficiency improvements to be implemented in the space and/or building (this could cover a range of language from agreeing to cost recovery clauses for capital improvement to agreeing to share the costs of LEED certification or retro-commissioning of the building).
Tenants and landlord applicants must be submitting for spaces larger than 50,000 gross square feet; brokers or broker teams for spaces larger than 10,000 square feet. The program recognizes that leasing documents may include confidential business information so redacted copies can be submitted. The cost is $250 to apply for companies and $50 for individual brokers or broker teams. Renewal report updates will be permitted to allow recognized premises to maintain their certifications annually.
Organizations that are recognized as Green Lease Leaders will also be mentioned in an annual press release, articles or newsletters in industry trade publications, featured in presentations at industry meetings, and have their organization’s logo displayed on a recognition page on the Green Lease Library. Awardees will also receive a Green Lease Leader seal image for display within their buildings and on the web.
Like you perhaps, for some time I have imagined that a program like this would be extremely successful in promoting green leasing practices, so I am excited to see how it unfolds. You can read more about the Green Lease Leader program here, or download a copy of the application by clicking here.