CPA & Business Advisory Blog

Real Estate: The Benefits of Green Leases

In the latest issue of The Boma Magazine (July/August 2009), an article by Stephanie J. Oppenheimer, APR, takes a closer look at green leases (Green Leases: A Study in Symbiosis, p.30).


The most effective green campaigns emphasize two main points: going green will save money and will be a team effort with shared responsibilities and consequences. An increasing number of commercial real estate owners and tenants are looking to green their leases in ways that will reduce costs and provide flexibility and fairness. Green leases are a contractual obligation between a landlord and tenant that emphasizes the conservation of energy and resources to provide a mutual benefit. Dual-incentive green leases allocate capital updates that affect the operating expenses of the facility. Adding a building’s energy performance into the leasing process adds both transparency and accountability to the agreement.


Being green often depends more on operations than on construction, and the lease can help everyone understand the tenant and landlord responsibilities. When attempting to green a building or lease, it is important to know what is going on in your tenant’s business and what works for them as well as to recognize that greening a lease may soon be unavoidable as some businesses turn to using only energy efficient facilities. The cost of retrofitting a building is continuing to drop with improved technology and an emphasis on making green the norm. Additional green products are being offered to reduce the cost of utilities and are becoming more readily available from vendors. When a green lease is done correctly, it is mutually beneficial to both parties.


For more information, please contact Skoda Minotti’s Real Estate and Construction Group at 440-449-6800.


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