"There are a growing, and already quite large number of initiatives that call themselves green leasing guides," not all of them effective, said Candace Damon, a partner at HR&A Advisors, New York City. "Some focus on pre-leasing, some on equipment, others on the lease itself. In the absence of a comprehensive statement of what green leasing is, we miss opportunities."
Regional differences play a role, Damon noted. New York State's office market is largely concentrated in New York City, and dominated by class A facilities. California has more than a dozen office markets, many of which have class B and even class C space.
"I don't know if there's a class A lease or a class B lease. There are class A tenants and class B tenants," said Steve Teitelbaum, a partner at Washington, DC-based law firm Jones Day, and the author of BOMA's lease guide, which focuses on operating green buildings.
In addition, the variety of professionals involved in a lease--architects, brokers, attorneys and engineers, among others--add terminology that many can misinterpret. But more associations and firms are trying to find common ground.
"Ground zero for me was September 2006," when the film "An Inconvenient Truth" was released, said S. Michael Brooks, CEO of the Real Property Assoc. of Canada (REALpac), Toronto. Brooks then spent 10 days in Sydney visiting with and interviewing landlords regarding their green initiatives. "North America is so far behind Australia, it's not funny."
At one building he visited, every tenant had a green lease, and one occupant was evicted after exceeding its energy quota for three straight months. Brooks and REALpac drafted a green lease following Australian documents, but based on LEED principles and released it in June 2008. It is a free download from the association's website: www.realpac.ca.
"We're working on the third version right now," Brooks said.
Another potential green lease was created by a task force of real estate brokers, corporate tenants, landlords, and green building consultants chaired by B. Alan Whitson, president of the Corporate Realty, Design & Management Institute. The main goal was to address the split incentive, which would allow both landlords and tenants to benefit from energy efficient buildings.
"They identified the cause of the problems, then created a lease from scratch," said Stephen T. Del Percio, an associate at New York law firm Arent Fox. The 50-page document--including exhibits--covers environmental performance objectives, rent structures, tenant energy use, annual performance reports to the tenants, hazard materials, and green cleaning, among other issues.
That even included a definition of a green building: "A building that is environmentally responsible, profitable and a healthy place to live or work."
The National Resources Defense Council has also looked at language and technique, focusing on the split incentive with a view to working with the largest tenants, reported Sean Neill, founder of Cycle-7, a Brooklyn, NY-based environmental services consultancy.
"I love the idea of a separate document from the core lease," Neill said. That could be particularly useful as regulations, technology and expectations change rapidly. Brooks suggested that marked targets are placed in the lease, with a clause indicating that applicable laws could supersede the lease. The key is to get started.
"It's never too late to green a lease," Brooks said. "It takes years to turn a building over. Start sooner rather than later."
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