the green lease: moving from concept to completion …8. green electricity supply contracts...

The Green Lease:Moving from Concept to Completion

[Abridged]

Presented by

Mark [email protected]

www.eefg.com

Copyright 2011 Mark Jewell. All rights reserved.

AGENDA

• What is “green”?

• What is a “green lease”?

• Are “green leases” attractive to landlords, tenants?

• Fit-out vs. operational aspects of “green”

• New “green lease” models from BOMA et al

• How do you “green” an existing lease?

• Commercial/legal practicalities

• Tips for moving forward…

What exactly does “green” mean?• Energy-sensitive design

• Efficiency and/or renewables

• Water-sensitive design

• Efficient plumbing; reuse of grey/stormwater

• Environmentally preferred products and services

• Sustainably and locally sourced materials

• Minimized maintenance over lifetime; high recycled content; recyclable at end of life

• Healthy interior environments

• Airflow; daylight; low levels of chemicals/allergens/irritants

• Minimal reliance on artificial lighting & HVAC; minimized noise

• Integrated waste management practices

• Reduced landfill use; max recycling/composting; hazardous materials properly addressedAdapted from Tim Power, “Lease Arrangements for Green Commercial Buildings”

Who says your building is green?

• No federal legislative standards (yet)

• Voluntary performance rating systems

o USGBC’s LEED®

o US EPA’s ENERGY STAR®

o Green Building Initiative’s Green Globes®

• Local ordinances

o Typically based on voluntary rating systems

What is a “lease”?• Lease is typically a multi-year agreement

• Documents relationship between L and T

o Grants T exclusive possession, quiet enjoyment, non-derogation

o Sets amount/method for paying/reviewing rent & expenses

o Limits T’s use to certain purposes

o Prohibits T from damaging the premises

• How much control can the L have over T fit-out and operation?

• When does a “green lease” cross the line?

o Paternalistic, uncompetitive, hard-to-enforce instruments won’t work

o Consider using appendix of “recommended practices” w/the lease

Adapted from Tim Power, “Lease Arrangements for Green Commercial Buildings”

What is a “green lease”?

• Educates tenants on “green” as applied to their space

• May set standards & mechanisms for collaboration

• Increases likelihood that L & T will achieve green goals

Adapted from Tim Power, “Lease Arrangements for Green Commercial Buildings” and other sources

What is a “green lease”? (cont’d)

• Adds legal/practical green dimensions…

o Sets measurable targets/benchmarks for envir. performance

o Sets reporting obligations, methods and periods

o Establishes remedies for missing agreed-upon targets

o Obligates L to submeter T’s energy & water use

o Establishes mechanism to appoint qualified, independent monitoring entity


What is a “green lease”? (cont’d)

• More legal/practical green dimensions…

o Sets targets to reduce usage over time

o Assesses whether additional ratings can be garnered over time

o Establishes mechanisms for remedies for non-performance

o May be longer term: LEED-CI gives credit for leases >10 yrs.

o Removes disincentives to going green (e.g., who pays/benefits)


Uh, oh…Did you say “remedies”?

• Lease terms are irrelevant if not measured & enforced

• Remedies can vary from slight to severe…

o L reimburses T for overage in operating expenses

o T pays no rent while building is in non-compliance

o T is permitted to terminate lease on non-compliance by L

o L is permitted to terminate lease on non-compliance by T

o Either party could pay pre-specified liquidated damages

• Compensate L or T for damage to its “brand” or “reputation”

• Reduction of asset value based on green rating downgrade

• Other


L’s typical “green” obligations to T

• Ensure that all building elements/systems are installed and operated at maximum efficiency

• Ban CFCs in HVAC systems

• Ban smoking in other than designated smoking areas

• Maintain easily accessible, dedicated area(s) for recyclable collection and storage of waste

• Ensure recyclables are actually recycled


L’s typical “green” obligations (cont’d)

• Reduce amount of waste sent to landfills

• Monitor lighting and HVAC use by occupants

• Use native/drought-tolerant plants in landscaping

• Provide bike storage, changing rooms, showers, lockers

• Minimize # of parking spaces to amount required by law

• Abide by reporting obligations for rating systems


Can the Landlord protect himself?

• L should ensure that all targets are cost-effective & attainable prior to obligating either party

• What portion of this “green compliance” is under Landlord’s own control?

o Lease administration

o Enforcement of “green” provisions in leases

o Reporting requirements

o Other


Can the Landlord protect himself? (cont’d)

• Landlord should obtain back-to-back warranties from A&E firms and developers to ensure realization of building material content, construction and performance

• Lease should contain specific provisions for…

o Assigning responsibilities for non-performance

o Determining remedies for non-performance


Why should landlords care?

• Expedited zoning approvals

• Supports ENERGY STAR, LEED and/or other certification processes

• Facilitates tenant attraction and retention

o CoStar, ENERGY STAR, Corporate Social Responsibility, RFPs specifying “green” criteria

o Tenant turnover is expensive! Shorter turnover periods add NOI.

o Lower operating expenses reduce T’s true “occupancy cost”

• Higher demand from investment community

Adapted from S. Michael Brooks materials; Real Property Association of Canada

Why should landlords care? (cont’d)

• Mitigates a variety of future risks

o Regulation, obsolescence, carbon trading, community activists, etc.

o Future increases in utility costs (energy, water, trash removal, etc.)

• Enhances eligibility for rebates/incentives

• Avoids “tragedy of the commons”

o Each and every tenant agrees to abide by “green” practices

o Establishes mutually accepted remedies for non-performance

• Holds potential to improve the competitiveness, profitability and value of the asset


Why should tenants care?

• Pride of location, environment

• PR value of positive branding

• “Green” space facilitates employee attraction/retention

• Evidence suggests “green attributes” help productivity

o Reduced absenteeism

o Reduced turnover

o Improved productivity

o Higher retail sales (where applicable)


Why should tenants care? (cont’d)

• Lower operating expenses

o Particularly on the “utilities” line item

o Could affect both energy and water costs

o Be wary of L’s right to pass through any/all “greening” costs

• Fits well with Corporate Sustainability Reporting

• Ultimately improves competitiveness and profitability

• That said, most “green” tenants so far are…

o Single-tenant, purpose-driven occupants

o Governments and other institutions w/green agenda

• NOTE: LEED CI can add cost to fit-outs


Is your current lease “green” enough?

• No environmental agenda, objectives, plan

• Can L submeter T’s utilities? Who pays for meters?

• Are L’s repair/maintenance clauses “green” compatible?

• Is T’s fit-out approach “green”? Should LEED CI be required? Are materials “green,” energy- and water-efficient?

• Are recycled fixtures/materials allowed?

• Can I prevent tenants from bringing non-green materials/substances into the building?


• Can L pass-through the cost of certification?

• Who gets carbon credits (or taxes), if any?

• Are lease’s utility limits adequate? Enforceable?

• Does applicable laws provision cover gov’t “green” mandates?

• Are there enforcement mechanisms/procedures and remedies sufficiently specified/quantified?

• Does lease mandate green cleaning?

• Can L purchase green power if it’s more $$$?

• Other…

Is your lease “green” enough? (cont’d)


• “The Green Lease Document Set”

o Green Lease

o Tenant Construction Manual re: “green” fit-out

o Tenant Procurement Guidelines Manual

o Green Building Primer for the Tenant

• “Green lease” versus “green schedule” added to existing lease

• Qualitative or quantitative? How strict?

• Which resources: energy, water, IAQ, materials, all of the above?

What does a “green lease” look like?


Green Lease Activity: AustraliaThe Green Lease Guide by Investa et al

http://eco-efficiency.management.dal.ca/Files/Green_Lease_Guide.pdf

Major “green” leasing elements

1. Building certification

2. Indoor environmental quality

3. Alternative transportation

4. Water use, storage and transport

5. Energy use (base-building and purchased equipment)

6. Management & monitoring

7. Maintenance and repairs

8. Recycling & efficient waste management

Excerpted from Green Lease Schedule, Version 3, 2007, Investa et al

Major “green” leasing elements (cont’d)

9. Toxic material source reduction & cleaning protocols

10. Construction & demolition waste management

11. Building management & tenant support

12. Persistence of “green” agenda

13. Rebuilding “green”

14. Default by tenant or landlord

15. Allocating costs/benefits between landlord and tenants


5. Energy use1. Tenant's global agreement to align its space use and

all related purchasing/operations w/building's green certifications

2. Energy management guarantee for tenants (e.g., caps on usage and greenhouse gas emissions…remember to normalize)

3. Monitoring and reporting of tenants’ energy use and greenhouse gas emissions

1. Install/use submeter to quantify each tenant’s use

2. Mandate T’s monitoring/reporting of energy use monthly

3. Limit T's use of electrically operated equipment consuming more than "x" watts/SF

4. Alternative approach: Require T to purchase carbon offsets for any amount of energy consumed above certain level

Adapted from Green Lease Schedule, Version 3, 2007, Investa et al

5. Energy use (cont’d)

4. Strict policies re: tenant-furnished energy-consuming equipment

1. Protocols for ensuring that tenant equipment is powered down after hours

2. Vending equip. (EE ltg./refrig.; off when area unoccupied)

5. Monitoring and reporting of base building energy use and greenhouse gas emissions

1. Careful design and enforcement of operating hours for any energy-related base building equipment

6. Regular maintenance/recalibration of base building services

7. Regular building recommissioning

8. Prompt action in response to performance issues


5. Energy use (cont’d)9. ENERGY STAR rating updated monthly10. Procurement of “green” power or DR, if available11. Lighting management

1. Efficient (and low-mercury) equipment selection and spacing based on application (including task lighting)

2. Lighting levels <= max footcandles or Lighting Power Density3. Occupancy and photocell sensors applied globally4. Control systems regularly checked/maintained5. Signs for employees and cleaners to turn off lights after use6. Lights cleaned periodically to remove dust build-up7. Layout to maximize daylight (w/appropriate allowances for

window shading)8. Energy-efficient signage (incl. exit signs); exterior signage

sensitive to light pollution concerns


5. Energy use (cont’d)12. HVAC

1. Efficient selection/installation of all HVAC systems

2. Thermostat settings for summer and winter

3. CFC-based refrigerants prohibited (units using <0.5 lbs. exempt)

4. Operable windows shall remain closed when HVAC is operating

13. Supplementary HVAC

1. Use temperature sensors and timers or occupancy sensors to control energy use

2. System regularly checked/maintained

3. Set IT room temp higher than surrounding office space

4. Space heaters require written permission in advance; must be occupancy-controlled


5. Energy use (cont’d)14. Electronic office equipment

1. EE settings are enabled on all equipment (and verified)

2. Equipment is switched off at power point over holidays

15. Purchasing office equipment1. No space heaters, fans, toasters, etc. in workstations

2. EE computers (ideally laptops) and LCD monitors

3. EE photocopiers that allow efficient use of paper & toner

4. Paperless faxing capability

5. EE faxes that allow efficient use of paper and toner

6. EE scanners

7. EE audio-visual equipment

8. Video-conferencing and tele-conferencing equipment


5. Energy use (cont’d)

16. Electronic office equipment power settings

1. EE settings are enabled on all equipment (and verified)

2. Equipment is switched off at power point over holidays

17. Housekeeping-related energy use

1. Housekeeping only provided weekdays excluding legal holidays

2. Housekeeping limited to weekday hours, w/potential to move to cleaning during normal business hrs.

18. Provision for CapEx cost recovery for any expense-reducing capital project


6. Management & monitoring


1. Energy management guarantee for tenants (caps on bills and greenhouse gas emissions)

2. Monitoring and reporting of tenancy energy use and greenhouse gas emissions

3. Monitoring and reporting of base building energy use and greenhouse gas emissions

4. Regular maint. & recalibration of base building services

5. Regular building recommissioning

6. Management & monitoring (cont’d)


6. Prompt action in response to performance issues

7. ENERGY STAR rating updated at least annually for the base building, and rating disclosed

8. Green electricity supply contracts available to tenants

9. Maintenance staff training on efficiency-related issues

7. Maintenance and Repairs

1. Maintenance and repairs performed by L or T must satisfy building's "green" agenda

2. Specify the following to be used:

1. ENERGY STAR-labeled appliances

2. High-efficiency lamps/ballasts

3. Low-mercury-content lamps

4. “Green” products

5. IAQ-friendly products

6. Environmentally friendly products

11. Building management & support

1. Green lease certificate issued annually to tenants

2. Building user guide for tenants

3. Environmental management plan for building

4. Regular reporting to tenants on base building environmental performance

5. Formal mechanisms for gathering tenant feedback (e.g., regular surveys)


11. Building management & support (cont’d)

6. Dedicated contact for tenants within the building management staff

7. Specified frequency of reporting

8. Assistance sourcing/recycling fit-out materials

9. Additional measures that support tenants in meeting their environmental objectives (see next slide)?



9. Green Office Checklist of ideal tenant practices

1. Reduce electric consumption1. Turn off overhead lighting when offices are unoccupied2. Install EE lamps in proprietary fixtures3. Minimize direct sunlight by closing blinds4. Allow window induction units to breathe freely5. Keep space heaters out of the building6. Seasonally modify your internal “comfort zone”7. Position workstations to receive natural light8. Program computers/copiers for low-power “sleep mode”9. Turn off computers/equipment when not in use10. Purchase ENERGY STAR office equipment

Adapted from Green Office Checklist, One Boston Place, CBRE, revised 3/1/08



2. Reduce water consumption1. Ensure data rooms are on tenant condenser water loop2. Limit water flow on kitchen sinks and bathroom fixtures

3. Administrative operations1. Replace fax machines with fax modem technology2. Institute a paperless record-keeping system3. Default photocopiers/printers to double-sided printing4. Reduce handouts at meetings5. Create a “reuse” area for lightly used office supplies6. Reuse office supplies or purchase recycled supplies7. Support local office supply and furniture manufacturers8. Minimize newspaper and magazine subscriptions9. Remove your name from catalog or “junk mail” lists10. Have a waste stream audit performed (at night)




4. Catering1. Eliminate paper plates and plastic forks, spoons and knives2. Stop purchasing bottled water3. Purchase coffee maker w/reusable mugs4. Ask caterers to hold the condiment and sugar packets5. Reject styrofoam packaging6. Purchase local catering

5. Business travel1. Use a bike courier for local deliveries2. Establish a hybrid car policy for business travel3. Encourage mass transportation or carpools4. Plan air travel on large aircraft w/few connections


12. Persistence of “green” agenda

1. Landlord has right to withhold approval of assignment or sublease unless assignee or sublessee agrees to “green” agenda

13. Rebuilding “Green”

1. Agreement to building to “then-current green building standards” when repairing/replacing property that has been damaged or destroyed

2. Insurance issues

1. Coverage for green features

2. Coverage for RCx & recertification expense

3. Endorsement of upgrading conventional to “green”

4. Insurance sources to consider

1. Fireman’s Fund: “GreenGuard” Insurance Program

2. AON: “Green Building Property Program”

14. Default by tenant or landlord

1. Definitions of default caused by failure to adhere to "green" guidelines set forth in the lease

2. Remedies for non-performance

1. Lease termination

2. Rent reduction or abatement

3. Other

3. Mechanisms for dispute resolution

1. Could be behavioral or failure of green features or technologies

15. Allocating costs/benefits

1. Net lease vs. gross lease more sensible now?

2. Are there base year issues to consider/address?

3. Does L have “carte blanche” for “greening”?

1. LEED certification and follow-on costs

4. How are financial benefits shared?

1. Operating expense savings

2. Rebates, tax abatements, etc.

3. White Tags, Carbon Offset Credits

4. Lower insurance and financing costs

Tenant’s “green” decisions…

“GREEN” FIT-OUT

• Lighting• Floor finishes• Walls & ceilings• Casework• Workstations• General office furniture• Kitchen fittings, appliances• Paints, sealants, adhesives• Bathrooms, toilets• Supplementary A/C• Submeters, “smart meters”• Indoor plants• Demo, construction waste

mgmt.

“GREEN” OPERATION

• Company policies & procedures• Purchasing smart office equip.• Managing office equipment• Purchasing stationery &

consumables• Lighting and HVAC

management• Waste management• Electricity supply contract• Carbon offsets policy• Cleaning & maintenance

contracts• Telecommuting, commuting &

travel policies for staff


“Green” leasing vs. LEED-CI

LEED-CI requires companies to meet six prerequisites…

1. Reduced energy use

2. Elimination of CFCs in mechanical systems

3. Well managed recycling program for common office materials

4. Adequate ventilation

5. Prevention of tobacco smoke in non-dedicated smoking areas

6. Commissioning of all energy-related systems to ensure they are operating efficiently

“Green Lease” and LEED-CI credits

How many points could “green leasing” approach capture?

Could L sign a 10-year lease (1 credit)?

Is L willing to change water fixtures (2 possible credits)?

Is L willing to change lighting systems (4 possible credits)?

Will L separate T’s utilities from others (1 credit)?

Adapted from 2008 Green Real Estate Guide, Sustainable Industries magazine

“Green Lease” and LEED-CI credits (cont’d)

How many points could a “green leasing” approach capture?

Could T eliminate parking spaces from lease (1 credit)?

Is building located within range of public transit and are there shower and/or changing facilities onsite (2 possible credits)?

Can L commit to partner with T to pay for green building improvements?

Adapted from 2008 Green Real Estate Guide, Sustainable Industries magazine

BOMA’s “Green Lease” (2011)

To purchase a copy, please visit www.boma.org

Corporate Realty, Design & Mgmt. Institute“Model Green Lease Reference Guide”

Ten Essential Elements for a Green Lease

1. Environmental performance objective2. Rent structure & operating costs3. Energy use by Tenant4. Operational performance5. Annual environmental performance report to Tenant6. Hazardous materials7. Green cleaning specifications8. Building regulations9. Tenant workletter agreement & contractor regs10. Tenant manual & development guidelines

Excerpted from the article, “Lease Structure Hinders Energy Efficiency” by Alan Whitson

• Table of Contents…

o Why green the leasing process?

o Greening the leasing process

o Tools for greening the leasing process

o Tenant-centric

o Includes useful resources as well…

US Green Buildings Council“Green Office Guide”

“Integrating LEED into Your Leasing Process”

• Table of Contents…

o Why green the leasing process?

o Greening the leasing process

o Tools for greening the leasing process

o Tenant-centric

o Includes useful resources as well…

US Green Buildings Council“Green Office Guide”

“Integrating LEED into Your Leasing Process”

• Coalition of tenants interested in pursuing green attributes

o Dupont*, Fluor, IBM Corp., Pitney Bowes; Switzer Group

o Collectively ~ 25 million SF in US (much in multi-tenant bldgs.)

• Use Checklist for RFPs for new leases and renewals

• Include providers’ responses as a factor in making lease decisions

• Develop appropriate metrics to measure progress

• GOAL: “…to drive an increase in the availability of competitively priced leased space that also provides energy efficient and other environmental attributes.”

Coalition for Energy and Environmental Leadership in Leased Space

*Facility Services and Real Estate

• 10 prerequisites in these 5 topic areas

o Sustainable Site

o Water Efficiency

o Energy & Atmosphere

o Materials & Resources

o Indoor Environment

o Tier I and Tier II Checklists

“Leased Space Environmental and Energy Efficiency Attributes:

Tenant Instructions”

• “Cost reduction resulting from more efficient use of energy, water and other resources and materials;

• “Increased employee (occupant) satisfaction through their ability to participate in services such as recycling and alternate commuting options and in working for an employer that is committed to environmental sustainability. Employee satisfaction will result in productivity gains and better employee retention.

• “Enhanced environmental leadership and public image meeting the expectations of employees, investors, communities and the public.”

“What are the benefits of doing this?”

Retrofitting existing space as “green”

• Rare that landlord can displace all tenants

• Single tenant has little influence over building beyond tenant’s own fit-out

• Single tenant cannot control other tenants’ spaces and/or actions

• That said, there have been successful “green” retrofits:

o 500 Collins Street in Melbourne, Australia

When are lease amendments used?

• Increase/decrease in rent or Op Ex

• Correction of errors or omissions

• Alteration of lease covenants

• Alteration of size of leased premises

• Alteration of the duration of the lease, including addition of further options for renewal


Amending lease to facilitate “green”• T’s requirement to keep premises clean…

o Amend to provide for green cleaning compounds, addition of recycling contractor, etc.

o Can T compel L to follow cleaning/recycling protocols?

• L’s right to enter premises for repairs…

o Amend to include ability to install “green” features

o Amend to allow L to monitor “green”-related compliance

• L’s right to approve any T improvements…

o L could veto any non-green Cap Ex (e.g., non-recycled material)

• L’s right to add “greening” to Operating Expenses…

o Should T have right to cap “greening” cost?

• L’s right to compel T to record and share data on energy/water use, procurement, recycling, etc.

Adapted from Freehills “Lease Arrangements for Green Buildings” and other sources

Amending lease to facilitate “green”

HOWEVER…

• L cannot breach T’s right to quiet enjoyment of space

• L cannot “derogate the grant” (i.e., L cannot do anything that would render the leased premises unfit or materially less fit for the originally permitted purpose)

Adapted from Freehills “Lease Arrangements for Green Buildings”

So what are the lawyers saying?Legal Arguments….• Is it commercially reasonable to expect a tenant to commit to adhere to sustainability practices not known at the time of lease signing?

• What will those additional practices cost the Tenant?

• Does the Landlord’s right to rescind, alter or waive rules/regs give it a blank check on sustainability issues?

• What is “market” vs. what is “market for green buildings”?

• What are the boundaries of default from L or T’s perspective?

• Does making standards quantitative rather than qualitative offer enough protection against ambiguity?

Landlord Covenants…• To achieve a specific energy rating throughout the term.

• To provide separate metersfor each Tenant’s water and electricity consumption

•To repair/modify buildings, plant and equipment so as to improve energy efficiency.

• To instigate a green management plan.

• To ensure that all plant and equipment operate efficiently.

• To obtain an annual independent audit of the building’s performance level.

Tenant Covenants…•To fit out and repair using recycled materials (or those that can be recycled) if practicable.

•Not to partition the premises in way that adversely affects the energy performance of the building.

•To observe and perform the Landlord’s green management plan.

•To return premises at end of the Lease with at least the same energy rating

The Landlord’s perspective…• Enhanced social and environmental image

• Should emphasize benefits, such as smart meters for net tenants to reduce and track their energy/water use

• Landlord must make only those “green” commitments he can meet

The Tenant’s perspective…• Ensure that green standards are referenced

• Include mechanisms to remedy Landlord’s non-performance (e.g., reduced rent, right to terminate the lease, other financial payments)

BrazeauSeller.LLPBusiness People. Business Law.

Differences between “green” and conventional lease• Existence of “Environmental Management Plan”

• Provides incentives and penalties for compliance with or breach of “green” provisions.

• “Green” breaches will generally not be considered a lease default.

Provisions to include in a “green” lease…• Explicit targets and benchmarks

• Remedies for non-performance by either Landlord or Tenant

• Rules and regulations for energy use, indoor air quality, materials used, and recycling

• Dispute resolution mechanisms to address missed targets or benchmarks

Blakes, Cassels & Graydon LLP

Provisions to include in a “green” lease…• Include definition of “reasonable” to include adherence to “green” objectives when reviewing/approving construction plans/specs

• Make sure construction bids consider both time and cost of “green” design, and factor in any longer lead times for construction

• If you are the most efficient tenant, insist on being removed from the building-wide operating expense pool and submeter instead

• Avoid vague descriptors like “best practices”

• Specify whether the “green” metric is one-time or ongoing

• Other than lease termination, most remedies involve time-consuming negotiations that are case-specific

• Consider including green-building-specific insurance products


Things to consider if you are the Landlord…• Can Landlord’s promised construction standard be provided using “commercially reasonable” best efforts?

• Does lease permit ongoing flexibility in the level of green rating the building will maintain?

• Is Tenant obligated to cooperate with building’s green plan, including any Tenant renovation activity?

• The Landlord should be permitted to recover all greening expenses.

Things to consider if you are the Tenant…• Has Landlord promised a green construction standard, can he actually provide it, and what if he fails to do so?

• Does Landlord have ongoing obligation to maintain standard?

• Can standards imposed on the Tenant be realistically obtained?

• Consider imposing a cap on the landlord’s permitted annual greening expenditures.


So where in the world can we find some actual green leases?

Australian Green LeasesCanadian Green LeasesNew Zealand Green LeasesUK Green LeasesUSA Green Leases

Green Lease Activity: AustraliaThe Green Lease Guide by Investa et al

http://www.environment.nsw.gov.au/resources/sustainbus/2006_1212_greenleaseguide.pdf

Green Lease Activity: Australia111 Alinga Street & 62 Northbourne Avenue, Canberra

1. Investa & Multiplex made significant investments in latest technology and infrastructure

2. Leases incorporate a Green Lease Schedule committed to rating of at least 4.5 in line with the Government’s Energy Efficiency in Government Operations (EEGO) policy

Australian Government, Department of Infrastructure, Transport, Regional Development and Local Government

Green Lease Activity: Australia60 Leicester Street, Carlton, Victoria, 3053 Australia

Lease Docs at “60 L”

1. The Agreement for Lease

2. The Green Building Principles and The Green Building Rules

3. The Environmental Management Plan (EMP)

4. Tenancy Fit-out Manual and Fit-out Schedule.

http://www.60lgreenbuilding.com/grnlease.htm

Green Lease Activity: CanadaGreen Lease Resource Center

REALpac National Standard “Green” Office Lease for Single Building Projects

1. Green Lease Document

2. News Release

3. Backgrounder

4. “Green Leases and Green Buildings” by S. Michael Brooks

http://www.realpac.ca

Green Lease Activity: CaliforniaCalifornia Sustainability Alliance

Green Leases Toolkit

1. Educate landlords and tenants

2. Develop green leasing policies and requirements

3. Communicate policies and requirements to the market

4. Measure and compare the green attributes of different buildings

5. Develop specific lease language

http://www.sustainca.org/content/green_leases_toolkit

Green Lease Activity: San FranciscoBusiness Council on Climate Change

Green Tenant Toolkit

1. Green Lease

2. Stakeholder Engagement

3. Checklists

4. Resources

http://www.greentenanttoolkit.com/

Green Lease Activity: New York CityPlaNYC

Energy-Aligned Lease Language

1. Overcoming the “Split Incentive”

2. Protecting the tenants from underperformance

3. Model lease language

4. Financial calculator

http://www.nyc.gov/html/planyc2030/html/about/ggbp.shtml

Green Lease Activity: New York CityPlaNYC

Energy-Aligned Lease Language

1. Overcoming the “Split Incentive”

2. Protecting the tenants from underperformance

3. Model lease language

4. Financial calculator

http://www.nyc.gov/html/planyc2030/html/about/ggbp.shtml

Green Lease Activity: PortlandNEEA and Unico – Commonwealth Building

“The Greenest Least Around”

1. Tenant improvement practices

2. Benchmarking, ENERGY STAR label

3. Separate metering

4. Itemizing energy costs

5. Ongoing building green initiatives

6. Hours of operation

7. Operating expenses

8. Lease term

9. Educating the market

http://www.betterbricks.com/sites/default/files/Office/bb_article_greenestlease.pdf

http://www.betterbricks.com/

10 Goals for Green Leasing

1. Clarify the rationale for sustainability

2. Reach consensus from all stakeholders

3. Define the boundaries of the sustainability program

4. Move the leases toward common ground

5. Assemble a green document set

6. Quantify requirements and set enforcement protocols

7. Incorporate incentives for collaboration

8. Establish a commitment to manage through measurement

9. Define the certification strategy and frequency

10. Establish the allocation of greening expenses

SOURCE: Mark Jewell’s “10 Goals for Green Leasing” authored for BetterBrickshttp://www.betterbricks.com/graphics/assets/documents/10_Goals_for_Green_Leasing.pdf

Keep in mind…

The “green lease” changes many of the typical concepts in a conventional lease.

Use caution when referencing old standards to define Landlord obligations, such as “first

class operations,” “reasonable landlord,” “commercially available” or “industry

standard best practice.”

Also keep in mind…

There really is no such thing as a standard “Green Lease Form.”

Each green lease that is prepared for signature will have to be customized so that it is appropriate for the particular property,

leasing market and tenant.

“Certified Green Broker” designation

• Joint project of the Cascadia Green Building Council and the Commercial Brokers Association

• 10 comprehensive 3-hour seminars presented in an interactive on-line format

• Content will focus on wide variety of green issues…

o Benefit of green leasing on L and T

o Tax incentives, ROI, reduced energy use

o More…

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