05/09/2014 | By Sarah Borchersen-Keto
Seven REITs have been named as 2014 Green Lease Leaders by a new program that recognizes property owners, tenants and brokers who are effectively using leases to save energy in commercial buildings.
Brandywine Realty Trust (NYSE: BDN), Empire State Realty Trust (NYSE: ESRT), Government Properties Income Trust (NYSE: GOV), Kilroy Realty Corp. (NYSE: KRC), Kimco Realty Corp. (NYSE: KIM), Liberty Property Trust (NYSE: LRY) and Regency Centers Corp. (NYSE: REG) were among the 2014 winners selected by the Institute for Market Transformation (IMT), a non-profit group, and the Department of Energy’s (DOE) Better Buildings Alliance.
“As a contractual arrangement, the lease is a powerful tool to help landlords and tenants increase building efficiency,” said Kristen Taddonio, manager of DOE’s Better Building Alliance.
The program organizers noted that historically, real estate owners and tenants have faced difficulties integrating sustainability into lease programs as a result of tensions over responsibilities and cost-sharing arrangements. The recognition program aims to prove that a wide variety of companies are already using green lease language and to highlight examples that others can follow.
Companies were selected based on lease clauses that improved sustainability on several fronts, including: sharing the costs of energy-saving improvements; ensuring tenants build out to green standards; sharing access to energy consumption data; and encouraging cooperation on environmental initiatives.
“Brokers, landlords and tenants now have a blueprint for writing leases that remove impediments to efficiency and align interests so landlords and tenants both benefit from improving building performance,” said Cliff Majersik, executive director for IMT.
Marla Thalheimer, Liberty Property Trust’s director for sustainability, stressed that as part of her company’s efforts to develop high-performance buildings and maintain healthy, productive work environments, the lease plays “an important role by laying the groundwork and ensuring a win-win outcome with the tenants.”
Janelle Strand, vice president for training and quality control at Kilroy Realty, said incorporating environmental language into the company’s lease agreements “helps ensure that tenant and landlord environmental interests are aligned, which allows us to deliver sustainable, high-quality, adaptable and productive work environments to our tenants.”