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10 Reasons to Sign a Green Office Lease

insider knowledge 2014 logoThis is one in a series of articles taken from entries in the 2014 Insider Knowledge Report.

Each year, when April 22 rolls around, thousands of companies trumpet their sustainability initiatives, paying homage to Earth Day while correlating Earth Day to a particular “green” product or service. To reinforce a commitment to the Earth throughout the year, companies can validate their dedication to sustainability by making their office space environmentally friendly. Signing a “green lease” puts that commitment in writing, typically while achieving energy and cost savings.

Rising in popularity with corporate tenants and their landlords (and even municipalities like New York City and San Francisco), free leases improve the environmental performance of a leased office space, ensuring that the company occupying the space and the landlord that owns the building are operating in a sustainable manner from the inside out. This energy- and cost-saving tactic typically results in additional cash flow for the building by increasing its appeal to corporate tenants.

Green leases combine the productivity, comfort and sustainability features that tenants are looking for in office space while supporting landlord priorities of improving the triple bottom line and occupancy rates. In addition to achieving both tenant and landlord objectives, green leases have social, economic and environmental implications for companies operating in today’s global economy. Green leases truly are the future of commercial real estate.

10 Reasons to Sign a Green Office Lease

The JLL Energy and Sustainability Services team recommends that tenants and landlords collaborate to develop a green lease that benefits each party, typically including the following 10 benefits:

  1. Reduce utility consumption and save money
  2. Improve working relationships
  3. Support corporate sustainability initiatives
  4. Enhance corporate image/brand
  5. Demonstrate vision and thought-leadership
  6. Improve civic relations
  7. Contribute to LEED and other green certifications
  8. Improve employee productivity, recruitment and retention
  9. Generate additional savings through waste stream diversions
  10. Do the right thing for the environment and its people

As tenants and landlords continue to see value in making office space more sustainable, green leases will become the new norm. To make a lease “green,” the terms must be structured to drive sustainable cost savings without negatively impacting building performance or comfort.

As with every lease, the green criteria should undergo careful evaluation to maximize effectiveness, sustainable success and cost savings. When weighing the costs and benefits of a green lease, consider completing an in-depth green lease site assessment and integrating RFP language that incorporates benchmarked green criteria applicable to both new leaseholds and renewing/renegotiating existing ones. Work with an advisor that understands both commercial leasing and green leases is critical to achieving both your real estate goals and your sustainability target.

By Meahan Farrell, energy and sustainability services, JLL.


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