The Key to Negotiating a ‘Green Lease’

by / Tuesday, 23 July 2013 / Published in Client Advocacy, CRE Trends, iCORE

Standard_PlanningAheadIs your company looking for ways to reduce their utility expenses?  Perhaps you’re seeking a new, energy efficient facility and aren’t sure where to start.

In theory “green leases” in which both the tenant and landlord benefit from energy efficiency improvements, are a no-brainer. In reality, tenants often hit resistance when trying to negotiate efficiency upgrades. As you may have experienced, oftentimes landlords don’t pay for utilities and, as a result, are not motivated to invest in projects that reduce energy costs.

To help empower tenants in negotiating green leases, the Retail Industry Leaders Association (RILA) and the Institute for Market Transformation (IMT) released guidelines for increasing energy efficiency and reducing water usage and waste.

The green lease primer captures several best practices including negotiating long-term leases in exchange for energy efficiency upgrades and using the Common Area Maintenance fee to cover small-scale improvements.  The guidelines also advocate that tenants consider alternatives to triple net leases in which they are solely responsible for utility costs. More than anything, these guidelines facilitate an important discussion between landlords and tenants.

For more information, check out the Green Lease Primer.

Negotiating lease terms and positioning your company for success can be tricky.  Thankfully our real estate professionals are always here to advocate for your best interests and help you secure a lease that works in the short and long-term.

To schedule a no obligation analysis with one of our CRE professionals, email us at info@icoreglobal.com.

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