CLEVELAND- KeyCorp and Columbia Property Trust announced this week that they had agreed to renew KeyCorp's lease for 487,000-square-feet in Cleveland's Key Tower. But as GlobeSt.com reported yesterday, the two did not negotiate a run-of-the-mill lease. Instead, they set out in detail how each will help reduce energy use at Key Tower and put in place procedures to track and adjust their efforts. Jones Lang LaSalle represented KeyCorp, the holding company for KeyBank, in the negotiations and calls the result a “green lease.”
“It's a rather new thing,” says Mark W. Collins, Midwest regional director for JLL, although the firm has been helping clients for several years design energy sustainability programs. In this case, negotiating the 15-year lease at the 57-story, 1.3-million-square-foot tower, KeyCorp's headquarters, was made easier due to the landlord's attitude. “Columbia was a willing partner and that's the best way for two parties to agree on an overall sustainability plan.”
“It was kind of easy to get through,” says Kane Kretzinger, the national retail property manager for KeyBank. For example, “the entire facility is LEED-certified,” which shows the commitment of Columbia, the owner since 2005, to energy sustainability and made negotiating environmentally-sensitive provisions relatively straightforward.
“This doesn't mean everyone has to be LEED Platinum or Gold to negotiate a green lease, but an expectation that the building will be operated in an environmentally sensitive way is desirable,” says Collins.
“We've been using sustainable building practices for 20 years, but this was our first significant green lease,” Kretzinger adds, and it points the way for the financial services company, which occupies a total of at least 3.5-million-square-feet of office space and 5.6-million-square-feet of retail bank space. “We are now putting this type of language in every lease we do.”
For their headquarters, KeyCorp now has a written agreement with Columbia that lays out the responsibility of each to lower energy use, water consumption and soften the environmental impact of running the building. Janitorial services will use green cleaning products, for example, KeyCorp committed to working with employees to decrease lighting use and both will collaborate on a recycling plan. Most importantly, they agreed to a set of financial incentives and periodic evaluations of their efforts.
Putting similar practices in place throughout KeyCorp's vast amount of occupied space might not be easy. “We anticipate pushback from some landlords who will see all this as cumbersome,” Kretzinger says. “But we're definitely going to negotiate the best terms we can even if each one is not technically a green lease.”
“It's our contention that we're going to see more of these types of leases in the future,” says Collins.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
