Green Leases Need to Reviewed Carefully

The topic of green leases and ways tenants and landlords can protect the financial interests associated with green building has been a big area of discussion over the last few years — and for good reason. As building owners continue to adopt green building practices both in newly constructed and existing buildings, they want to protect their investment and the value created by earning LEED green certification of their portfolio. On the flip side, many more tenants are looking to lease space in green buildings, are persuading landlords to seek LEED certification of existing buildings as part of the lease negotiation, and are building out tenant space as LEED for Commercial Interiors projects. To assist the industry in navigating this new market reality, the U.S. Green Building Council (USGBC) developed the “Green Office Guide: Integrating LEED Into Your Leasing Process,” a new resource to help tenants and landlords collaborate and provide specific tools and information that will help integrate green decision making throughout the leasing process.

There are now numerous examples of green leases ranging from full lease forms to specific sustainability riders. While these are important tools for the real estate industry, what the market lacked was a comprehensive resource that guided tenants, owners, brokers and attorneys through the process of integrating green thinking into the entire leasing process, not just into the lease terms. The leasing process constitutes much more than just the legally binding agreement. Building qualification and selection, leasing, landlord qualification and green tenant build-outs are complex processes, and while the lease terms frame key legal areas of the tenant-landlord relationship, decisions are made throughout the process that impact the success of the project’s green goals.


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Geared toward corporate tenants and their brokers, the “Green Office Guide” provides specific tools that help teams navigate the nuances of successful execution. Building owners, agency representatives and attorneys find value in understanding what prospective sustainability-focused tenants are looking for when selecting a prospective landlord or building. Among the topics covered in the guide include selecting the right team, qualifying and selecting buildings and landlords, lease negotiations and specific legal language, the tenant build-out, and the tenant’s ongoing operations and relationship with an existing landlord.

One of the challenges with green leases is that there is no “one size fits all” when it comes to negotiating a green lease. By educating practitioners on the process and the options, tenants and landlords can better collaborate to achieve a solution that works for both parties. The “Green Office Guide” tackles areas in which tenants and landlords may not be familiar, from background on LEED and green building, to the different steps of the leasing process, to how to actively build green thinking into standard practices. Other invaluable tools such as sample RFP language, site selection checklists, criteria for qualifying brokers and other project team professionals, and sample green lease provisions with extensive drafting notes are all covered.

This resource is the first in a suite of commercial integration guides by USGBC aimed to educate and be a companion resource to those interested in green building but are not immersed in the process on a daily basis. The “Green Operations Guide: Integrating LEED Into Your Property Management” will be released in August 2010 and will be an invaluable resource for those real estate professionals working towards the greening of existing buildings. Practical solutions for energy, water and waste reduction will be discussed and purchasers of the guide will receive access to editable electronic policy templates and tools that can aid in certification documentation. The “Green Retail Guide: Integrating LEED Into Your Leasing Process,” also available this summer, will focus on the nuances of a successful green leasing process with a specific focus on the retail marketplace.

With every sector now playing a vital role in the green building movement, understanding how sustainability can be incorporated and lucrative for all is a vital component of achieving green buildings for all within a generation.


Katie Rothenberg
Katie Rothenberg is manager of the commercial real estate sector at the U.S. Green Building Council.