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Gulf Coast Green 2010, Alan Whitson, Model Green Lease

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Gulf Coast Green speaker, Alan Whitson, presented "Model Green Lease" on 4/15/2010 in Houston, Texas

Gulf Coast Green speaker, Alan Whitson, presented "Model Green Lease" on 4/15/2010 in Houston, Texas

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    Gulf Coast Green 2010, Alan Whitson, Model Green Lease Gulf Coast Green 2010, Alan Whitson, Model Green Lease Document Transcript

    • Model Green Lease Model Corporate Realty, Design & Management Institute 4850 SW Scholls Ferry Road, Suite 203 Green Portland, OR 97225 503.274.7162 www.squarefootage.net Lease B. Alan Whitson, RPA 949.262.9380 AWhitson@squarefootage.net © B. Alan Whitson, RPA Model Green Lease - 2010 1 B. Alan Whitson, RPA • Real Estate Experience – 40 Million Square Feet • Office • Industrial • Data Centers • Hotel & Resort – Roles • Asset Manager • Commercial Real Broker • Construction Manager • Development Manager • Facility Manager • Real Estate Consultant • Author – Books, Articles & Software Bank of America - San Francisco, CA © B. Alan Whitson, RPA Model Green Lease - 2010 2 Corporate Realty, Design & Management Institute - www.squarefootage.net 1
    • Model Green Lease Articles, Books & Software Articles Books & Software • Lease Structure Hurts Energy • 327 Questions to Ask Before Efficiency You Sign a Lease – BOMA Magazine, June 2005 – 1992 • Green Lease • Building Operating Cost – Environment Design + Model Lease Addendum Construction, July 2006 – 1993 • Green Lease Agreements: • Bottom Line - Comparative Navigating Uncharted Waters Lease Analysis Software – Sustainable Industries, – 1994 April 2008 • 365 Important Questions to Ask • Turning Green in Gold About Green Buildings – OfficeInsights – Co Author Jerry Yedulsen – 2006 © B. Alan Whitson, RPA Model Green Lease - 2010 3 Advisory Board Model Green Lease Project • Jeff Austin • Gary Christensen • Paul Williams Wachovia The Christensen Co. Webcor • Clint McMorris • Richard Johnson • George Lohnes Toyota Matrix Development UGL Unicco • Laurie McMahon • Dave Hewett • Randy Burke Cassidy & Pinkcard David W. Hewett, Inc. DCS Daylight Cleaning Colliers • Vicki Harding Systems • Olivia Millar Pepper Hamilton • James Kiriazes Studley • Patrick Ramsey Siemens • Bruce Hecht Paul Hastings • Don Millstein Swearingen Realty Group • Shannon Sentman E-Mon • Gaines Bagsby Holland & Knight • David Kanada CB Richard Ellis • Scott Chrisner IDeAs • Jeff Woolf Chrisner Group • Kim Shinn Cushman & Wakefield • Paul A. King TLC Engineering Bovis Lend Lease © B. Alan Whitson, RPA Model Green Lease - 2010 4 Corporate Realty, Design & Management Institute - www.squarefootage.net 2
    • Model Green Lease Agenda Criteria Content • Minimum Legal Speak 1. Background • Real World & Economic Benefits – Objective, Approach, Benefits – Workplace Performance & Costs • Evidence Based – Commercial Real Estate Leases • Concepts 2. Model Green Lease – Green buildings don’t cost more – Ten Essential Elements – Marketplace set rents, you – Implementing the Model Green define your costs Lease – Good design & management adds value faster than cost – What gets measured - gets improved – Sustainability is not a product, it is the benefit of the process – Quality is free, doing things wrong is expensive © B. Alan Whitson, RPA Model Green Lease - 2010 5 Background Objective, Approach, Benefits Workplace Performance & Costs Commercial Real Estate Lease Corporate Realty, Design & Management Institute - www.squarefootage.net 3
    • Model Green Lease Objective - Model Green Lease Project Create an incentive to effectively, design, build, and manage high-performance and sustainable office buildings through a green lease. © B. Alan Whitson, RPA Model Green Lease - 2010 7 Approach - Model Green Lease Project • Clean Sheet of Paper – Not a Cut & Paste of Existing Standard Form Lease – Rethink the Tenets of Current Office Leasing Practices – Build on Historical Context Where Appropriate – Integrate Building Science & Improved Technologies • Plain Language Document – Easy to Read & Understand – Specific & Performance Based • Neutral – Fair & Balanced – Neither Landlord or Tenant Centric – Advisory Board • Follow ANSI review and input formula © B. Alan Whitson, RPA Model Green Lease - 2010 8 Corporate Realty, Design & Management Institute - www.squarefootage.net 4
    • Model Green Lease Benefits - Model Green Lease • Congruent Environmental Goals – Landlord & Tenant • Alignment of Costs & Benefits – Return Operational Risk to Landlord & Reward Landlord for Operational Excellence • Landlord's Have Technical Expertise – Tenants Do Not • Metrics & Verification of Building Performance – Annual Report • Improved Performance – Building & Workplace • Increased Asset Value © B. Alan Whitson, RPA Model Green Lease - 2010 9 Workplace Performance & Costs © B. Alan Whitson, RPA Model Green Lease - 2009 10 Corporate Realty, Design & Management Institute - www.squarefootage.net 5
    • Model Green Lease How Well Does the Workplace Perform? General Satisfaction - Building General Satisfaction - Workspace Office Layout Office Furnishings Thermal Comfort Air Quality Lighting Acoustics Cleanliness & Maintenance -3 -2 -1 0 1 2 3 IEQ Database Green Buildings Source: CBE, IEQ Database - Occupant Satisfaction > 210 Buildings 34,000 Respondents © B. Alan Whitson, RPA Model Green Lease - 2010 11 ...Personal Lighting Control © B. Alan Whitson, RPA Model Green Lease - 2010 12 Corporate Realty, Design & Management Institute - www.squarefootage.net 6
    • Model Green Lease The Workplace & People - Ten Year Cost Office Rent $68,973 347 SF @ $24.03 Yr * 8% 1% Tenant Improvements $8,683 1% 347 SF @ $25.00 10% Office Furniture $8,014 $6,000 + $300 Yr * Technology $87,471 $10,000 + $10,000 Yr * Salary & Benefits $690,356 $83,678 Yr * Total Costs $863,497 Present Value 10-Years 80% Energy is 0.6% of Total Costs Rent T/I Furniture Tech Salary & Benefits Source: BOMA, BLS, * 2.5% Annual CPI, PV @ 5.75% Discount rate © B. Alan Whitson, RPA Model Green Lease - 2010 13 Understanding Commercial Real Estate Leases © B. Alan Whitson, RPA Model Green Lease - 2009 14 Corporate Realty, Design & Management Institute - www.squarefootage.net 7
    • Model Green Lease What’s A Lease? • Elements Required for a Lease – Parties – Property – Term – Consideration • Lease Defines the Contractual Relationship Between Landlord & Tenant – Who Does What, When, How, and Who Pays – Esoteric Issues: Financing, Insurance, Destruction ... – Survives Changes in Building Ownership © B. Alan Whitson, RPA Model Green Lease - 2010 15 Landlord’s & Tenant’s Business Objectives Landlord Tenant • Maximum Return on Investment • Productive Workplace – Cash Flow & Sale Proceeds – Location • Net Operating Income – Building Quality – Vacancy Rate – Program - Space Efficiency – Lease Up • Limit Capital Investment – Build Out & Move In – Use of Space – Not Ownership – Tenant Turnover • Limit First Costs – Limit Capital Investment • Flexibility • Durability of Income Stream – Shorter Lease Term – Tenant Credit Worthiness – Longer Lease Term • Total Cost of Occupancy – Predictable • Financial Management – No Surprises – No Surprises © B. Alan Whitson, RPA Model Green Lease - 2010 16 Corporate Realty, Design & Management Institute - www.squarefootage.net 8
    • Model Green Lease Lease Negotiation Process © B. Alan Whitson, RPA Model Green Lease - 2009 17 Leasing Process – Tenant Seeking Space Define Criteria Landlord Proposals Final Proposals Search & Inspection Building Evaluation Decision Indentify Candidates Financial Analysis Draft Lease Request for Proposals Narrowing of Field Final Negotiations Negotiations Final Lease © B. Alan Whitson, RPA Model Green Lease - 2010 18 Corporate Realty, Design & Management Institute - www.squarefootage.net 9
    • Model Green Lease Where Does Green Enter the Deal... Define Criteria Landlord Proposals Final Proposals Search & Inspection Building Evaluation Decision Indentify Candidates Financial Analysis Draft Lease Request for Proposals Narrowing of Field Final Negotiations Negotiations Final Lease © B. Alan Whitson, RPA Model Green Lease - 2010 19 Where Do You “Green” a Lease? • A building’s environmental performance standards are defined in specific lease clauses or lease exhibits: – Building Use – Rent – Operating Expense – Services & Utilities – Hazardous Materials – Maintenance & Repairs – Alterations & Improvements – Building Rules & Regulations – Contractor Rules & Regulations – Tenant Work Letter © B. Alan Whitson, RPA Model Green Lease - 2010 20 Corporate Realty, Design & Management Institute - www.squarefootage.net 10
    • Model Green Lease Lease Negotiation Issues The Lease Space Time Financial Legal Physical Amount Occupancy Base Rent Sublease Building Hours Load Factor Lease Term Escalation Assignment HVAC Improvement Expansion Rent Commencement Non-Disturbance Power Allowance Storage Renewal Free Rent Self-Help Services Parking Submittals Operating Expenses Repairs Tenant Fit-Out Identity Notices After Hours Charges Cancellation Hazardous Material Insurance/ Takeover Future Alterations Destruction/Taking Equity Restoration © B. Alan Whitson, RPA Model Green Lease - 2010 21 Lease Negotiation Issues - Green The Lease Space Time Financial Legal Physical Amount Occupancy Base Rent Sublease Building Hours Load Factor Lease Term Escalation Assignment HVAC Improvement Expansion Rent Commencement Non-Disturbance Power Allowance Storage Renewal Free Rent Self-Help Services Parking Submittals Operating Expenses Repairs Tenant Fit-Out Identity Notices After Hours Charges Cancellation Hazardous Material Insurance/ Takeover Future Alterations Destruction/Taking Equity Restoration © B. Alan Whitson, RPA Model Green Lease - 2010 22 Corporate Realty, Design & Management Institute - www.squarefootage.net 11
    • Model Green Lease Model Green Lease Ten Essential Elements of the Model Green Lease Implementing the Model Green Lease Ten Essential Elements Model Green Lease Environmental Performance Objective Corporate Realty, Design & Management Institute - www.squarefootage.net 12
    • Model Green Lease Environmental Performance Objective • Purpose: – Establishes “intent” of parties – Define common environment goals for tenant and landlord • Issues: – Lease are long-term agreements – People that negotiated lease, may not administer the lease – Things change; Laws, Technology, Science, and Standards • Tools: – Set “big picture” goals in Lease – Use Rules & Regulations and other lease exhibits (e.g. Building Standards, Cleaning Requirements, and Contractor Rules & Regulations) to define operational details © B. Alan Whitson, RPA Model Green Lease - 2010 25 Environmental Performance Objective… (a) The parties agree it is in their mutual best interest that the Building and Premises be operated and maintained in a manner that is environmentally responsible, fiscally prudent, and provides a safe and productive work environment. (b) The Tenant shall conduct its operations in the Building and within the Premises to minimize: (i) direct and indirect energy consumption and greenhouse gas emissions; (ii) water consumption; (iii) the amount of material entering the waste stream; (iv) negative impacts upon the indoor air quality of the Building and Premises. © B. Alan Whitson, RPA Model Green Lease - 2010 26 Corporate Realty, Design & Management Institute - www.squarefootage.net 13
    • Model Green Lease Environmental Performance Objective (c) The Landlord shall operate and maintain the Building and the Premises to minimize: (i) direct and indirect energy consumption and greenhouse gas emissions; (ii) water consumption; (iii) the amount of material entering the waste stream; (iv) negative impacts upon the indoor air quality of the Building and Premises. (d) The Landlord shall use its reasonable efforts to cause other tenants of the Building to conduct their operations in the Building and their premises in conformity with the Environmental Performance Objective. © B. Alan Whitson, RPA Model Green Lease - 2010 27 Ten Essential Elements Model Green Lease Rent Structure Corporate Realty, Design & Management Institute - www.squarefootage.net 14
    • Model Green Lease Rent Structure • Purpose: – Reward Landlord for designing, building, managing and owning a high-performance and sustainable office building • Issues: – Net lease format creates a financial disincentive for Landlord – Net lease format creates minimal financial incentive for Tenant • Tools: – Gross Lease with Expense Stop or Base Year • Comprehensive Expense Definition – Amortization of Project Costs Which Reduce Operating Costs – Retro-Commissioning Services • Right to Audit Clause © B. Alan Whitson, RPA Model Green Lease - 2010 29 Glossary • Escalation Clause: A lease clause that provides for the rent to be increased. This may be accomplished by several means such as fixed periodic increases, increases tied to the consumer price index or adjustments based on changes in operating expenses paid by the landlord in relation to an expense stop or base year reference. • Base Year: Actual operating expenses for a specified base year, most often the year in which the lease commences. Once the base year expenses are known, the lease essentially becomes an expense stop lease. • Expense Stop: An agreed dollar amount for operating expenses (expressed for the building as a whole or on a square foot basis) over which the tenant will pay its pro-rated share of increases. May be applied to specific expenses (e.g., property taxes or insurance). Also called “dollar stop.” © B. Alan Whitson, RPA Model Green Lease - 2010 30 Corporate Realty, Design & Management Institute - www.squarefootage.net 15
    • Model Green Lease Glossary • Operating Expenses: The cost of operating an office building, such as cleaning, repairs and maintenance, utilities, security, management fees, taxes, insurance and similar day-to-day expenses. Operating expenses should not include financial expenses like debt service, ground leases, depreciation and income taxes; capital expenses such as roof replacement; any expense associated with the production of income such as leasing commissions and legal fees. • Right to Audit: A lease clause that gives the tenant the right to audit the lease and defines the process for doing so. The goal of a lease audit is to determine whether charges assessed by the landlord under a tenant’s lease are correct and proper, and refund any overcharges by the landlord to the tenant. © B. Alan Whitson, RPA Model Green Lease - 2010 31 Lease Types © B. Alan Whitson, RPA Model Green Lease - 2009 32 Corporate Realty, Design & Management Institute - www.squarefootage.net 16
    • Model Green Lease Gross and Net Leases Lease Type Continuum Gross Lease Net Lease Gross Lease: Net Lease: According to The base rent The base rent CoStar 58% of does include office buildings does not include building taxes, do not include building taxes, insurance, utilities, energy in their insurance, utilities, or other operating base rent or other operating expenses expenses © B. Alan Whitson, RPA Model Green Lease - 2010 33 The Net Lease Paradox Landlord's Perspective Tenant's Perspective A B C D A B C D Base Rent Operating Expenses Base Rent Operating Expenses © B. Alan Whitson, RPA Model Green Lease - 2010 34 Corporate Realty, Design & Management Institute - www.squarefootage.net 17
    • Model Green Lease The Gross Lease Advantage Landlord's Perspective Tenant's Perspective A B C D A B C D NOI Operating Expenses Base Rent © B. Alan Whitson, RPA Model Green Lease - 2010 35 Three Myths About Operating Expenses © B. Alan Whitson, RPA Model Green Lease - 2009 36 Corporate Realty, Design & Management Institute - www.squarefootage.net 18
    • Model Green Lease Myth One We have done a good job of reducing energy use in office buildings © B. Alan Whitson, RPA Model Green Lease - 2009 37 Income & Expense 2007 - 1985 2007 2006 2005 2004 2000 1995 1990 1985 Total Income $23.74 $23.86 $22.75 $24.04 $22.72 $19.33 $17.26 $14.73 Cleaning 12% 1.36 1.34 1.21 1.20 1.17 1.20 1.15 1.05 Repairs & Maint. 11% 1.71 1.69 1.55 1.52 1.37 1.55 1.38 1.21 Utilities 21% 2.35 2.28 2.00 1.83 1.86 1.87 1.84 1.85 Road, Grd & Security 8% .88 .82 .72 .73 .68 .61 .50 .38 Administrative 12% 1.32 1.37 1.18 1.22 1.18 1.12 .90 .68 Fixed Expenses 36% 3.89 3.70 3.06 3.39 3.14 2.98 2.84 2.17 Total Expenses $11.61 $11.08 $9.72 $9.89 $9.40 $9.33 $8.61 $7.34 Net Operating Income $12.13 $12.78 $13.03 $14.15 $13.32 $10.00 $8.65 $7.39 BOMA Experience Exchange Report, All Buildings © B. Alan Whitson, RPA Model Green Lease - 2010 38 Corporate Realty, Design & Management Institute - www.squarefootage.net 19
    • Model Green Lease Commercial Electricity Prices 11 10 9 8 Cents per kWH 7 6 5 4 3 2 1 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Source: EIA – Form EIA 826 - Oct 2009 Table 5.3 US Annual Avg. © B. Alan Whitson, RPA Model Green Lease - 2010 39 Electricity Usage Interior Light Cooling Heating Ventilation Office Equipment Exterior Light Water Refrigration & Cooking Misc. 0% 5% 10% 15% 20% 25% 30% © B. Alan Whitson, RPA Model Green Lease - 2010 40 Corporate Realty, Design & Management Institute - www.squarefootage.net 20
    • Model Green Lease Myth Two Net leases encourage tenants to control their operating costs © B. Alan Whitson, RPA Model Green Lease - 2009 41 Benchmarks Agency Managed Corporate Facilities Downtown Downtown Number of Buildings 140 22 Total Building Rentable Area 121,606,342 Sq Ft 21,490,188 Sq Ft Average Building Size 868,616.7 Sq Ft 976,826 Sq Ft Office Occupancy Rate 88.39% 85.76% Sq Ft/Office Worker 312.08 267.03 K BTUs/Sq Ft 81.06 109.83 Building Hours/Week 111.40 131.79 Electricity Cost Sq Ft – Avg. $2.23 $2.99 BOMA Experience Exchange Report - 2008 © B. Alan Whitson, RPA Model Green Lease - 2010 42 Corporate Realty, Design & Management Institute - www.squarefootage.net 21
    • Model Green Lease Operating Expense Comparison Agency Managed Buildings - Downtown Corporate Facilities - Downtown 25 50 75 25 50 75 Average Percentile Percentile Percentile Average Percentile Percentile Percentile Cleaning 1.47 1.08 1.43 1.77 1.71 1.12 1.65 2.00 Repairs & Maint. 1.86 1.29 1.78 2.17 2.33 1.42 1.80 2.89 Utilities 2.32 1.59 2.10 2.60 2.69 2.04 2.44 3.21 Roads/Grounds .08 .04 .06 .10 .18 .04 .08 .15 Security .85 .57 .75 .98 .83 .58 .78 1.04 Administrative 1.11 1.51 1.05 1.51 .96 .45 .70 1.59 Total Operating 7.94 6.10 7.32 8.69 9.67 7.41 8.54 10.33 Fixed Expenses 5.06 2.84 4.27 6.32 3.28 2.01 3.10 4.90 Total $13.00 $9.57 $11.69 $15.28 $11.82 $9.77 $11.78 $13.61 BOMA Experience Exchange Report - 2008 © B. Alan Whitson, RPA Model Green Lease - 2010 43 On Average 21.8% Higher Operating Costs $10.33 $9.67 $8.54 $8.69 $7.94 $7.41 $7.32 $6.10 25 Percentile Median Average 75 Percentile Agency Managed Corporate Facilities BOMA Experience Exchange Report - 2008 © B. Alan Whitson, RPA Model Green Lease - 2010 44 Corporate Realty, Design & Management Institute - www.squarefootage.net 22
    • Model Green Lease Myth Three There is little variation in operating costs among Class A office buildings in a city © B. Alan Whitson, RPA Model Green Lease - 2009 45 Operating Expenses Vary Greatly • 163 Office Buildings Utilities • 600,000 Sq. Ft. or More • Downtown (CBD) 25% Middle 25% < $1.59 50% > $2.82 • 11 Cities Atlanta (13) Boston (20) Charlotte (8) Chicago (39) $1.23 Dallas (7) Houston (15) Minneapolis (15) New York (10) Philadelphia (6) San Francisco (24) Seattle (6) $0 $1 $2 $3 $4 249 Building Avg. Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 46 Corporate Realty, Design & Management Institute - www.squarefootage.net 23
    • Model Green Lease Cleaning Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $1 $2 $3 $4 $5 $6 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 47 Repairs & Maintenance Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $1 $2 $3 $4 $5 $6 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 48 Corporate Realty, Design & Management Institute - www.squarefootage.net 24
    • Model Green Lease Utilities Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $1 $2 $3 $4 $5 $6 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 49 Roads & Grounds Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $1 $2 $3 $4 $5 $6 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 50 Corporate Realty, Design & Management Institute - www.squarefootage.net 25
    • Model Green Lease Security Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $1 $2 $3 $4 $5 $6 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 51 Administrative Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $1 $2 $3 $4 $5 $6 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 52 Corporate Realty, Design & Management Institute - www.squarefootage.net 26
    • Model Green Lease Total Operating Expenses Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $2 $4 $6 $8 $10 $12 $14 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 53 Fixed Expenses Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $2 $4 $6 $8 $10 $12 $14 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 54 Corporate Realty, Design & Management Institute - www.squarefootage.net 27
    • Model Green Lease Total Operating & Fixed Expenses Atlanta Boston Charlotte Chicago Dallas Houston Minneapolis New York Philadelphia San Francisco Seattle $0 $5 $10 $15 $20 $25 $30 Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 55 The Spread in Operating Expenses Atlanta 35.8% Boston 18.2% Charlotte 26.8% Chicago 30.8% Dallas 24.9% Houston 21.2% Minneapolis 25.8% New York 37.6% Philadelphia 8.0% San Francisco 7.0% Seattle 16.7% 0% 20% 40% 60% Data Source: 2008 BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 56 Corporate Realty, Design & Management Institute - www.squarefootage.net 28
    • Model Green Lease Case Study Banner Bank Building Boise, ID LEED CS, Platinum © B. Alan Whitson, RPA Model Green Lease - 2009 57 Banner Bank Building - Boise, ID • 180,000 Sq Ft, 11-Stories • Construction Costs – $120 Sq Ft • Opened July 2006 – 14% Leased at opening – Building accounted 34% of vacant space in CBD – 85%+ Leased in 1-Year – 98%+ Leased • Office Rents – $19.00 - $21.50 Gross Lease • CBD Market Rate • Operating Costs – 37.4% Below Competitors © B. Alan Whitson, RPA Model Green Lease - 2010 58 Corporate Realty, Design & Management Institute - www.squarefootage.net 29
    • Model Green Lease Design & Construction • LEED CS Platinum – 50% - Less Energy Use – 80% - Less Water Use • Building Features – Column Free Space – Under Floor Air Distribution – Moveable Wall System – Lighting Control – Low E Glass – Cool Roof – Recycled Water • Stormwater – Low Flow Plumbing Fixtures – Geothermal Heat © B. Alan Whitson, RPA Model Green Lease - 2010 59 Value was Added in Four Areas 1. Spending in one area is offset by greater savings in other areas • Raised Floor - HVAC 2. Improving the quality of operations • Temperature & IAQ 3. Capitalize the savings in operating costs • Electric Hand Dryers • $373,333 Value Added 4. Tax savings and cost of change over • Movable Walls, Modular PVD Cabling, Raised Floor © B. Alan Whitson, RPA Model Green Lease - 2010 60 Corporate Realty, Design & Management Institute - www.squarefootage.net 30
    • Model Green Lease Valuation - Income Capitalization Method Per Square Foot “Market” Downtown Boise Total Income $19.95 - Total Expenses -7.75 = Net Operating Income $12.20 ÷ Capitalization Rate 7.5% = Building Value $162.67 Downtown Boise, ID Colliers © B. Alan Whitson, RPA Model Green Lease - 2010 61 Value of Building Green Per Square Foot “Market” Downtown Boise Banner Bank Building Total Income $19.95 $19.95 - Total Expenses -7.75 -4.85 = Net Operating Income $12.20 $15.10 ÷ Capitalization Rate 7.5% 7.5% = Building Value $162.67 $201.33 Value Created per sq ft $38.66 Total Value Created $6,960,000 Downtown Boise, ID Colliers © B. Alan Whitson, RPA Model Green Lease - 2010 62 Corporate Realty, Design & Management Institute - www.squarefootage.net 31
    • Model Green Lease How Tenants Benefit with Green Lease $21.50 $21.00 $20.50 $20.00 $19.50 Base Year Year 2 Year 3 Year 4 Market Banner Bank Assume 5% Annual Increase in Operating Costs © B. Alan Whitson, RPA Model Green Lease - 2010 63 Ten Essential Elements Model Green Lease Energy Use by Tenant Corporate Realty, Design & Management Institute - www.squarefootage.net 32
    • Model Green Lease Energy Use by Tenant • Purpose: – Manage Tenant Energy Use • Issues: – Define baseline energy use for tenant - include in Base Rent – Actual Tenant Usage replaces Pro Rata Share Allocation • Tools: – Energy Allowance: 6.4 KWH/Sq Ft/Year – 21.8 KBtu/Sq Ft/Year • Building Hours 59 Hours per Week • Lights 0.78 Watts per Sq Ft – EPAct 2005 • Plug Load 1.30 Watts per Sq Ft – Sub-Metering • Management by Exception Process © B. Alan Whitson, RPA Model Green Lease - 2010 65 Reducing Building Operating Hours is Key Weekly Operating Hours When HVAC Is Provided Without Extra Charge Agency Managed Buildings Downtown Suburban All Buildings 88.70 77.28 50K - 99K Sq Ft 79.84 75.69 100K - 299K Sq Ft 80.87 76.98 300K - 599K Sq Ft 88.86 88.83 >600K Sq Ft 106.62 94.94 Model Green Lease Building Hours - 59 Hours per Week Mon – Fri 7:00 am to 6:00 pm Sat [with prior notice] 8:00 am to 1:00 pm Data Source: BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 66 Corporate Realty, Design & Management Institute - www.squarefootage.net 33
    • Model Green Lease Building Operating Hours per Week Atlanta Boston Chicago Cleveland Denver Houston Los Angeles Minneapolis New York Philadelphia San Francisco Washington 0 20 40 60 80 100 120 140 Data Source: BOMA Experience Exchange Report © B. Alan Whitson, RPA Model Green Lease - 2010 67 Calculating the Energy Allowance Lighting (w/sq ft) .78 Plug Load (w/sq ft) 1.3 Sub-Total 2.08 Operating Hours/Week × 59 Sub-Total Week 122.72 Convert to Annual × 52 Sub-Total Annual 6,381.44 Convert to KWH/Sq Ft ÷ 1000 Total KWH/Sq Ft/Year 6.3814 KBtu/Sq Ft/Year 21.8 Lighting - EPAct 2005, 40% Reduction from ASHRAE 90.1-1999 Plug Load - 2007 oPod Study of California Offices © B. Alan Whitson, RPA Model Green Lease - 2010 68 Corporate Realty, Design & Management Institute - www.squarefootage.net 34
    • Model Green Lease Case Study New York Times New York, NY © B. Alan Whitson, RPA Model Green Lease - 2009 69 New York Times Light Controls “We designed our building to use 1.28 watts per square foot of lighting power ... The New York Times Company is using only 0.38 – that’s 70% less.” Glenn Hughes Director of Construction for The New York Times Company during design, installation, and commissioning of The New York Times Building Strategies: – Scheduling 2% – Occupancy Sensors 10% – Daylight Harvesting 30% – Light Level Tuning 58% Savings: $315,100 yr / $0.51 sq ft Current NYC Code is 1.1 watts © B. Alan Whitson, RPA Model Green Lease - 2010 70 Corporate Realty, Design & Management Institute - www.squarefootage.net 35
    • Model Green Lease Ten Essential Elements Model Green Lease Operational Performance Operational Performance • Purpose: – Define buildings operational performance in relation to specific performance standards and metrics • Issues: – Lease have traditionally used vague terms like “reasonable”, “comparable with other Class A office buildings” • Tools: – ANSI/ASHRAE 55-2004, Thermal Environmental Conditions for Human Occupancy – ANSI/ASHRAE 62.1-2004, Ventilation for Acceptable Indoor Air Quality – Commissioning & Retro-Commissioning © B. Alan Whitson, RPA Model Green Lease - 2010 72 Corporate Realty, Design & Management Institute - www.squarefootage.net 36
    • Model Green Lease Heating, Ventilation and Air Conditioning (a) Heating, ventilation and air conditioning (“HVAC”) during Normal Business Hours, in season at such temperatures and in such amounts as to comply with ANSI/ASHRAE Standard 55-2004, Thermal Environmental Conditions for Human Occupancy, and ANSI/ASHRAE Standard 62.1-2004, Ventilation for Acceptable Indoor Air Quality. Air filtration shall be provided and maintained with filters having a minimum efficiency reporting value (MERV) as determined by ANSI/ASHRAE Standard 52.2-1999, Method of Testing General Ventilation Air Cleaning Devices for Removal Efficiency by Particle Size. Pre filters shall be have a MERV of 8 or higher, and final filters shall have a MERV of 14 or higher for all outside air intakes and inside air recirculation returns. © B. Alan Whitson, RPA Model Green Lease - 2010 73 Heating, Ventilation and Air Conditioning (b) The HVAC system which services the Premises shall be designed, installed and maintained in a manner which shall maximize its efficiency and shall, during Normal Business Hours, maintain the temperature of the Premises within the following range of temperatures, subject to unusual heat loads caused by Tenant's extraordinary use of the Premises or alteration of the Premises made contrary to the provisions of this Lease: Summer Outside: 93° F Dry Bulb - 74° F Wet Bulb Inside: 75° F Dry Bulb - 50% Relative Humidity Winter Outside: 22° F Dry Bulb Inside: 72° F Dry Bulb - 50% Relative Humidity Building's HVAC internal heat loads shall be based upon [INSERT] watts per rentable square foot (RSF) for lighting and power and one (1) person per one hundred and fifty (150) rentable square feet. © B. Alan Whitson, RPA Model Green Lease - 2010 74 Corporate Realty, Design & Management Institute - www.squarefootage.net 37
    • Model Green Lease Ten Essential Elements Model Green Lease Annual Performance Report to Tenant Annual Performance Report to Tenant • Purpose: – Transparency, Environmental Reporting – Encourage Measurement & Verification, and Benchmarking • Issues: – Energy, Water, Recycling • State of California requires Building Energy Statement in 2009 – Certification of Building Performance Compliance by Landlord – Landlord Record Keeping, and Auditable by Tenant • Tools: – Integrates with Annual Operating Expense Adjustment Process – Sub Metering, Contractor Rules & Regulations – Accounting System, Building Automation, and Green Vendors © B. Alan Whitson, RPA Model Green Lease - 2010 76 Corporate Realty, Design & Management Institute - www.squarefootage.net 38
    • Model Green Lease Annual Performance Report Metrics • Energy Use • Water Use • Waste Stream Actual / Per Sq Ft Actual / Per Sq Ft By weight or volume – Electricity – Irrigation – Consumables – Natural Gas – Domestic Cold Water – Durable goods – Steam – Domestic Hot Water – Construction & – Chilled Water – Cooling Tower Demolition – Fuel Oil – Other Process Water – Total – Total Potable Water – Reporting levels • Renewable Energy Used • Sent to landfill or – Renewable Energy incineration facilities – Reclaimed or Grey Used • Diverted from landfill or Water Used incineration facilities – Percentage of Total Energy • Waste Diversion Rate • Operating Hours © B. Alan Whitson, RPA Model Green Lease - 2010 77 Case Study Hearst Tower New York, NY © B. Alan Whitson, RPA Model Green Lease - 2009 78 Corporate Realty, Design & Management Institute - www.squarefootage.net 39
    • Model Green Lease Design • 46 Stories, 856,000 Sq Ft • LEED C&S Gold, LEED CI Gold • “The Hearst Tower is designed to be 26% more energy-efficient than a standard office building.” • Key Lighting Design Features – 14,000 Light Fixtures – Photo sensors control artificial light based on the amount of natural light available – Motion sensors turn off lights and computers when area is unoccupied Hearst Tower – New York, NY © B. Alan Whitson, RPA Model Green Lease - 2010 79 Real Life: July 28, 2008 2:38 AM © B. Alan Whitson, RPA Model Green Lease - 2010 80 Corporate Realty, Design & Management Institute - www.squarefootage.net 40
    • Model Green Lease Ten Essential Elements Model Green Lease Hazardous Materials Hazardous Materials • Purpose: – Requires that neither landlord or any tenant violates any federal, state or local law or regulations regarding the use, generation, presence, storage, disposal, or release of hazardous materials – Defines what is a “hazardous material” • Issues: – Requires expert legal help – Survives lease expiration or termination • Tools: – Federal, State & Local Laws and Regulations • CERCLA (Comprehensive Environmental Response, Compensation and Liability Act) • RCRA (Resource Conservation and Recovery Act) • TSCA (Toxic Substances Control Act) © B. Alan Whitson, RPA Model Green Lease - 2010 82 Corporate Realty, Design & Management Institute - www.squarefootage.net 41
    • Model Green Lease Understand the Priorities • Health & Safety – OSHA – Local Fire - HazMat • Legal – Liability – Fault – Duty of Care • Insurance – Risk Management – Coverage • Marketing – HazMat Suits + TV Crew = Bad © B. Alan Whitson, RPA Model Green Lease - 2010 83 Ten Essential Elements Model Green Lease Cleaning & Recycling Corporate Realty, Design & Management Institute - www.squarefootage.net 42
    • Model Green Lease Cleaning & Recycling • Purpose: – Improve IAQ & Safety, Save Energy, Reduce Waste Stream • Issues: – Tenant Education – Worker Training, Correct Equipment, and Purchasing Program • Tools: – Effective Tenant Communications Program – Common Environmental Goal – Lease Clause – Building Rules & Regulations – Lease Clause & Lease Exhibit – Green Cleaning – Lease Exhibit • Green Seal, Environmental Choice – Daytime Cleaning Program © B. Alan Whitson, RPA Model Green Lease - 2010 85 Case Study Joe Serna, Jr. Building Sacramento, CA © B. Alan Whitson, RPA Model Green Lease - 2009 86 Corporate Realty, Design & Management Institute - www.squarefootage.net 43
    • Model Green Lease The Joe Serna Jr. Building – Calif./EPA HQ • 950,000 Square Feet • $270 Million • 3,000 Calif. EPA Employees • EPA Energy Star – Energy Star Rating 96 – One of the most energy efficient high-rise office buildings in nation – 37.1 kBTU/SF/Yr. – Lighting load .69 W/Sq. Ft. • USGBC LEED-EB Platinum • Recycling Program is a Profit Center © B. Alan Whitson, RPA Model Green Lease - 2010 87 How To Keep Waste From Becoming Trash • Standard trash can is mixed paper recyclable picked up by janitors – no liners – 3,000 Liners/Day $65,000 Year - Savings • 206 recycling centers located throughout building • Managing the Waste – Recycling White Paper Pays – Recycling Reduces Pick-Ups – Compactor Cuts Trash Volume – < 2 Pick-Ups per Month © B. Alan Whitson, RPA Model Green Lease - 2010 88 Corporate Realty, Design & Management Institute - www.squarefootage.net 44
    • Model Green Lease Daytime Janitorial Greens Bottom Line • Janitorial Hours – 11:00 am to 8:00 pm – Night Utility Crew • Instituted in 2001 Energy Crisis – 8% Energy Reduction – $100,000 Energy Savings • Turnover Almost Zero • 70% Reduction in Complaints – $120,000 Savings in Labor Hours – Tenants Become Supervisors © B. Alan Whitson, RPA Model Green Lease - 2010 89 Ten Essential Elements Model Green Lease Building Rules & Regulations Corporate Realty, Design & Management Institute - www.squarefootage.net 45
    • Model Green Lease Building Rules & Regulations • Purpose: – Guidelines for day to day operation and maintenance of building, e.g., security, recycling, after hours entry, ban space heaters – Allows Landlord to adjust operations without amending Lease • Issues: – Lease clause: “...shall at all times abide by and observe the rules and regulations...” – Landlord may change with notice to tenant, and “...shall not be inconsistent with the provisions of the lease” – Failure to comply can be a default by the Tenant • Tools: – Rules & Regulations Lease Language and Exhibit © B. Alan Whitson, RPA Model Green Lease - 2010 91 Rules & Regulations - Lease Exhibit • Every office worker should have a copy Rules & Regulations or access to via Building's website • Partial List of “Green” Issues – Ban energy-intensive devices, such as space heaters – Recycling – Smoking – Pesticides & Chemicals – Cooking “Odors” – Living Creatures – Health Emergency © B. Alan Whitson, RPA Model Green Lease - 2010 92 Corporate Realty, Design & Management Institute - www.squarefootage.net 46
    • Model Green Lease Ten Essential Elements Model Green Lease Fit-Out of Tenant Spaces Fit-Out of Tenant Spaces • Purpose: – Reduce environmental impact of Tenant Fit-Out & Churn • Issues: – Construction Waste Management – Initial Fit-Out & Renovations – IAQ Impact – Churn & Adaptability to Future Needs – Restoration • Tools: – Lease – Work Letter or Construction Letter – Contractor Rules & Regulations – High Performance Building Standards © B. Alan Whitson, RPA Model Green Lease - 2010 94 Corporate Realty, Design & Management Institute - www.squarefootage.net 47
    • Model Green Lease Contractor Rules & Regulations • IAQ Construction Management Plan in place during build out and prior to occupancy • Follow building’s green housekeeping practices • Follow building’s low-VOC and IAQ practices • Contractor to provide Material Safety Data Sheets (MSDS) • Provide contractor information to meet building’s green purchasing policy © B. Alan Whitson, RPA Model Green Lease - 2010 95 High Performance Building Standards • Modular Power/Voice/Data • Moveable Walls & Glazing • Paperless Drywall • Carpet Tiles • High Performance Ceiling Tile • Sound Masking • Long Life Low Mercury Lamps • Lighting Controls – Occupancy Sensors – Daylighting – Dimmable Ballasts • “Flex-Head” Sprinklers Bank of America Tower – New York, NY © B. Alan Whitson, RPA Model Green Lease - 2010 96 Corporate Realty, Design & Management Institute - www.squarefootage.net 48
    • Model Green Lease Ten Essential Elements Model Green Lease Tenant Manual & Development Guidelines Tenant Manual & Development Guidelines • Purpose: – Inform tenant how to get the most out of their space and building • Issues: – Explain sustainable feature and benefits, procedures and operating parameters in non-technical terms to Tenant and Tenant's employees – Provide insights on how to maximize the building's design, systems, and building standards to create a high performance and sustainable workplace – Continuity of design intent • Tools: – Tenant Manual – Day to Day Operational Issues – Development Guidelines – Tenant Fit-Out © B. Alan Whitson, RPA Model Green Lease - 2010 98 Corporate Realty, Design & Management Institute - www.squarefootage.net 49
    • Model Green Lease Implementing the Model Green Lease • New Buildings & Major Renovations • Existing Buildings © B. Alan Whitson, RPA Model Green Lease - 2009 99 New Buildings & Major Renovations • Internal Education – Audience • Listing Broker • Property Manager • Construction • Legal • Lender – Message • What's Different • What's the Same • What are the Benefits • Marketing – Differentiate Your Building – Sell the Benefits – KISS © B. Alan Whitson, RPA Model Green Lease - 2010 100 Corporate Realty, Design & Management Institute - www.squarefootage.net 50
    • Model Green Lease Existing Buildings • Develop Action Plan – Useful Tools • Energy Star • GBI/ BOMA Go Green • LEED EB • Model Green Lease • Analyze Costs & Benefits – Market Driven Issues – Economic Value Added – Understand Tenant’s WIIFM • Develop Implementation Plan – Tie to Asset Management Plan • Timing – Exit Strategy • Budget, Rebates & Incentives – Tenant Communications Plan © B. Alan Whitson, RPA Model Green Lease - 2010 101 Existing Buildings Behind the Existing New Scenes Tenants Tenants Building Rules & Regulations Green Cleaning Environmentally Preferred Purchasing Retro Commissioning/Energy Star Energy Efficiency Upgrade – Base Building Recycling Program Daytime Cleaning High Performance Building Standards Contractor Rules & Regulations Energy Efficiency Upgrade – Tenant Space Transition From Net to Gross Lease Format © B. Alan Whitson, RPA Model Green Lease - 2010 102 Corporate Realty, Design & Management Institute - www.squarefootage.net 51
    • Model Green Lease The Bottom Line 1. Greening your lease is possible right now, regardless of your situation or marketplace 2. Benefits exceed the costs, in the short and long-term 3. ENERGY STAR and LEED certification are not obligatory – But ... 4. High performance must be a part of your culture 5. Constant monitoring, preventive maintenance, and continuous improvement are key to success 6. Effective tenant communication is vital © B. Alan Whitson, RPA Model Green Lease - 2010 103 Model Corporate Realty, Design & Management Institute 4850 SW Scholls Ferry Road, Suite 203 Green Portland, OR 97225 503.274.7162 www.squarefootage.net Lease B. Alan Whitson, RPA 949.238.9380 AWhitson@squarefootage.net © B. Alan Whitson, RPA Model Green Lease - 2010 104 Corporate Realty, Design & Management Institute - www.squarefootage.net 52
    • Faulty Assumptions Plague Too Many Green Lease Blogs B. Alan Whitson RPA Every day I get a Google Alert on green operating issues and see how the language leases, which I dutifully read and then click in a green lease and a bad lease differ. on the various twits, blogs and websites listed in the alert. Sometimes there is a well 1. Energy researched nugget. Sadly, the typical article This is a simple case of follow the money. is riddled with misconceptions, faulty Only real estate taxes top energy as the assumptions, and over simplification of the largest operating cost for an office building. commercial leasing process. Too often, the The key to controlling and reducing energy authors failed to grasp building operating use in an office building is for the landlord practices, real estate economics, or the to profit from doing so. Tenants have nuance of negotiating a lease. minimal financial incentive to reduce energy consumption. Of a tenant’s total cost Six years ago, many considered it of doing business; people account for 80 revolutionary when I wrote the Ten percent, rent which includes energy is 8 Essential Elements of a Green Lease. The percent. Energy alone accounts for only 0.6 10 elements were based on using the right percent of an office tenant’s total cost of rent structure, appropriate technology, doing business. Given current energy costs performance standards, coupled with and usage patterns, if a tenant did reduce measurement and verification to create a energy use by 40 percent, the savings would financial incentive for green buildings not be sufficient to buy every employee a rather than the some platitude about saving daily cup of coffee at Starbucks. Even if this the planet. Some still believe that copying a did happen it’s doubtful that a tenant would little language from a LEED reference guide see any of energy savings, since the pro rata into an existing lease document will create a share allocation method spreads the savings green lease. While, this may give a lease a over the total rentable area of the building. green tint, it does not result in a green lease. ...adopting the structure of the I’m aware of attorneys who’ve invested Model Green Lease can cut countless hours tweaking existing leases energy use by 30 to 50 percent with riders in the hope of crafting a green lease. This additive approach can result in over comparable buildings. some small improvement but it usually does Under the Model Green Lease a landlord is nothing more maintain the status quo which responsible for all energy costs up to the is not sustainable. The Model Green Lease energy allowance. This creates a powerful Task Force concluded early on that the best financial incentive to seek out energy approach was to start with a clean sheet of savings and to keep the building in top paper, and a clear set of goals: remove the condition. This encourages a whole building split financial incentive, reward landlords approach to energy management and using for superior operational and environmental the appropriate technology such as the performance, and provide tenants with an lighting system installed in the New York environmentally responsible and productive Times Buildings. The building code in New workplace. Let’s exam five building York limits lighting to 1.1 watts per square Corporate Realty, Design & Management Institute www.SquareFootage.net
    • foot. The lighting system used in the Times tenants trailing only rental rate. Yet these Building has reduced lighting energy to two issues are the greatest source of tenant 0.38 watts per square foot. This equates to a dissatisfaction with a building. combined energy savings from lighting and cooling of $1.00 per square foot. From the Green Lease The lease should state that tenant’s side the use of sub-meters brings the building’s HVAC system will be over allowance energy use to the forefront operated in compliance with very quickly. How you may ask? Somebody ANSI/ASHRAE Standard 55, Thermal within the tenant’s organization will have to Environmental Conditions for Human budget for it. Also if excess energy use or Occupancy and ANSI/ASHRAE Standard after hours charges are billed to individual 62.1, Ventilation for Acceptable Indoor Air department’s P&L, those responsible for Quality. Including this reference in the lease that P&L will scrutinize that expense provides a measurable performance metric. closely. Experience has shown a 30 percent reduction in over allowance and after hours Bad Lease Terms like “reasonable” or use after installation of sub-meters. “comparable with other class “A” office Engineering analysis shows that adopting buildings located in the area” are use to the structure of the Model Green Lease can describe how a building will be operated. cut energy use by 30 to 50 percent over comparable buildings. 3. Recycling, Daytime & Green Cleaning, Green Pest Management Green Lease Modified Gross Lease with What’s not to like about this? Recycling can Expense Stop or Base Year; Realistic turn a cost center into a profit center. Energy Allowance for tenants and sub- Daytime cleaning cuts energy use from 4 to metering for tracking each tenants energy 10 percent and you get a cleaner building use, and separate sub-meters for high with fewer complaints. Green cleaning and energy uses such as server rooms; Control green pest management protect the health actual building operating hours and safety of the janitorial staff and tenants. Tenants won’t object unless you make the Bad Lease Net Lease, Pro-rata Share process too complicated. A major bank in Allocation of Operating Cost promote the Canada decided to introduce a corporate status quo recycling program. When the program was rolled it out, they could not find a branch 2. Operating Performance bank in their system that didn’t already have A few years ago the National Institute of a recycling program started by the Science and Technology did a survey of 100 employees. office buildings and found that half of them were taking in less than the minimum Green Lease Appropriate Lease Clauses, amount of fresh air as required by ASHRAE Lease Exhibits, Building Rules & 62.1. Moreover, 25% of the buildings were Regulations such as those in the Model operating at less than half the minimum air Green Lease make implementation a intake rate. Over-ventilation was just as straightforward task. rampant as under-ventilation. Both can have a negative impact on tenant comfort, indoor Bad Lease If the lease does not address air quality and energy use. Comfortable these topics – It’s not a green lease. temperatures and indoor air quality are the second and third most important issues for Corporate Realty, Design & Management Institute www.SquareFootage.net
    • 4. Annual Environmental Performance whether the tenant is seeking certification Report such as LEED for Commercial Interiors or The idea of the annual environmental not. performance report comes from management guru Peter Drucker, “What Green Lease Tenant Workletter gets measured, gets managed.” When the Agreement and the Contractor Regulations Model Green Lease Task Force first raised contain language that defines sustainable the idea of the Annual Report, there was product requirements and construction some resistance. California and a growing practices to be used in constructing the number of jurisdictions are now requiring tenant improvements. an annual report. Since the landlord operates the building and pays all the bills it Bad Lease If the lease and its exhibits is reasonable for the landlord to collect, do not specify the sustainable product analyze and report performance data to the requirements and construction practices to tenants along with the annual operating be used in constructing the tenant budget and annual expense reconciliation. improvements – It’s not a green lease. After the Model Green Lease was released, Andy Fuhrman and Alan Edgar of OSCRE This Spring the Model Green Lease Task asked the Model Green Lease Task Force to Force will release the latest update to the work with the OSCRE Green Lease Model Green Lease including three new Advisory Board to set up the data exchange tenant workletter agreements. The update standards. This newly released standards will be sent to all registered users. The makes the collection, analysis and reporting Model Green Lease is available for of information quick and easy for the purchase online at www.squarefootage.net landlord and provides transparency to the tenants. Alan Whitson is President of the Corporate Realty, Design & Management Institute; Green Lease A lease clause with and Chair of the Model Green Lease Task appropriate lease exhibit detailing the Force. Click on www.squarefootage.net for information the landlord will provide the a seminar schedule, Alan’s speaking tenant each year on operating hours, energy schedule, books, CDs, software, and Model use, renewable energy, water use, and Green Lease template. recycling. You can contact Alan Whitson at Bad Lease If the lease doesn’t require awhitson@squarefootage.net an annual report – It’s not a green lease This originally appeared in Alan Whitson’s 5. Interior Construction Turning Green in Gold column in OfficeInsight The initial fit-out of tenant space coupled on March 8, 2010. with the subsequent tenant turnover can have a significant impact upon the environment and indoor environmental quality of a building. The interior construction should comply with requirements for low VOC content, dust control, proper material handling and storage, and recycling of construction waste Corporate Realty, Design & Management Institute www.SquareFootage.net