Green Lease is Ready to Roll
July 10, 2014
Commercial developers, landlords and brokerage teams are all looking for ways to build and promote sustainability in their projects. Likewise, tenants are looking for “green” workspace. Smith & Howard’s space at 271 17th Street is, in fact, a LEED Certified building. We understand the importance of green space from many perspectives. But understanding the rules behind sustainability standards can be frustrating and creating a sustainable project that can be reflected in tenants’ leases has been a daunting task.
Fortunately, the United States Department of Energy has launched the Green Lease Leader certification program. This program recognizes commercial landlords and brokerage teams that have successfully implemented environmentally friendly leases, but as importantly, sets a uniform definition for what an environmentally friendly lease actually contains.
A new standard
To satisfy the qualifications of a Green Lease, a lease must include a tenant cost recovery clause that can be used for energy-efficiency-related capital improvements.
In other words, the lease should expand the list of operating expenses to include capital expenses intended to save energy. A Green Lease will require at least three of the following:
Note that a commercial landlord must have a Green-Leased portfolio that exceeds 50,000 gross square feet to qualify for the designation.
The application process
The 2015 application cycle is scheduled to open this fall. Applicants must pay a $250 fee and submit at least two signed and executed Green Leases. (Submitted leases may be redacted to protect sensitive or proprietary information.)
The application also requires a narrative description of the landlord’s internal Green Leasing initiative. The narrative portion will be scored based on the Green Leasing–related accomplishments. For example, developing a model Green Lease as an internal resource will earn 4 points, while holding meetings with decision-making executives to discuss incorporating green clauses into leases will earn 2 points. Developing and distributing a “Green Tenant Guide” scores 3 points.
A Green Lease Leader must earn 15 points. 10 will come from the leases, with each approved lease worth 5 points. A minimum of 5 points is required from the narrative portion.
Going green to get green
Going green may not be easy, but it can pay off. Adopting the changes required to get the Green Lease Leader designation could reduce costs, improve tenant satisfaction and provide a marketing boost. For more information, call Mark Abrams, Tim Agnew, Sean Taylor, Cas Pittman or Chris Conrad of our real estate team at 404-874-6244.
If you have any questions and would like to connect with a team member please call 404-874-6244 or contact an advisor below.CONTACT AN ADVISOR
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