October 26, 2017 | Emily McLaughlin

Leasing negotiations and the thought of adding another layer to them can seem intimidating on the surface. However, enhancing a lease with language that addresses energy efficiency and sustainability, or simply tacking on a green addendum to a standard lease is a smart and innovative energy solution that fosters collaborative action between landlords and tenants. Today’s leading organizations are proving that green, also known as “energy aligned” or “high-performance” leasing blazes a trail to win-win outcomes that improve performance, savings, and tenant satisfaction in any new or existing building.

For a quick introduction to how green leases work, check out IMT’s three-minute visual introduction. According to a 2015 study by the Institute for Market Transformation (IMT), green leasing can save the U.S. office market $3.3 billion annually and reduce utility bills up to 22 percent in each building.

Knowing this potential, IMT and the DC Sustainable Energy Utility (DCSEU) recently worked together to analyze how organizations are driving high-performance buildings in Washington, D.C. through green leasing. The result is the below infographic that showcases some key elements of a green lease and provides landlords and tenants a solid base in which to modernize their own leases to align incentives and boost efficiency.

What makes a successful green lease?

The Tower Companies (Tower) has been executing green leasing practices in their buildings for nearly 10 years. The below infographic (click to download and expand) demonstrates what makes a lease green and includes some real-life examples from Tower’s green lease addendums.

    (Click above to download and expand the infographic)

As you can see from the infographic, Tower’s lease takes the company’s performance across its portfolio to new levels by encouraging better occupant behavior to save energy and water, requiring tenant real estate professionals to obtain industry-recognized training such as LEED, improving access to tenant utility data for managing and measuring performance (utility benchmarking), and more.

“We take our responsibility to address our environmental impact seriously, as evidenced by our commitment to green leasing practices over the last decade,” said Jeffrey Ambramson, Partner of The Tower Companies. “Using our leases as a mechanism through which we can lead by example while developing and maintaining high-performance properties is good business for both us and our tenants. It not only engages tenants on sustainability, but also incentivizes landlords and tenants to work together to reduce operating expenses, save energy and water, and create healthier, more comfortable environments.”

Quick Facts:

  • Green leases have the potential to provide the leased U.S. office market over $3 billion in annual cost savings (What’s in a Green Lease?)
  • A 2004 Lawrence Berkeley National Lab study showed that retro-commissioning a commercial building can save $0.11 to $0.72 per square foot (The Cost-Effectiveness of Commercial Buildings Commissioning)
  • The U.S. Energy Information Administration estimates that the total leased U.S. office market comprises 6.4 billion square feet (2012 Commercial Energy Building Consumption Survey)

Green Lease Leaders

As a pioneer in green leasing, Tower has been recognized by IMT and the U.S. Department of Energy (DOE) Better Buildings Alliance as a Green Lease Leader since 2014. The Green Lease Leaders program was created by IMT and DOE to set an industry standard for green leasing practices and to recognize forward-thinking companies and real estate practitioners who break down barriers to high-performance buildings by revolutionizing leases to incorporate energy efficiency and sustainability.

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Program Area(s):

Real Estate

Meet the Author

Former Program Manager, Private Sector Engagement

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