06/13/2013 | by Carisa Chappell

After discovering that 85 percent of the energy used within its shopping centers came from tenants, Kimco Realty Corp. (NYSE:  KIM) is starting a pilot program at one if its malls to reduce energy usage in tenant-occupied spaces.

Kimco on June 13 announced a partnership with the Pacific Gas & Electric Company (PG&E), seeking to identify ways to improve the efficiency of leased retail spaces. Other goals of the initiative include helping to identify and eliminate barriers to investments in energy-efficiency improvements by tenants.

The program is believed to be the first of its kind, according to Will Teichman, director of sustainability for the retail REIT.

“Particularly in the retail sector of commercial real estate, there’s been a lack of focus on energy efficiency in smaller tenant spaces," he said.

Kimco has been collecting energy usage data since 2010 when it launched its Corporate Responsibility Program. As a result of that data collection, Teichman said it became clear that Kimco’s tenants are the primary users of energy, as opposed to the energy used in common areas throughout the property.

Consequently, Teichman said Kimco is trying to break down some of the traditional barriers between landlords and tenants. Namely, Kimco is encouraging them to share information about their energy usage. Teichman spent the day of the announcement at Westlake Shopping Center in Dale City, Calif., where the pilot program was launched. He said he’s been talking to tenants and getting releases signed for the sharing of data.

Smaller retail tenants tend to lack knowledge of how to improve their efficiency, according to Teichman.

“They’ve got a lot of different things on their plate. They are more focused on selling inventory in their stores,” he said.

Teichman added that under a triple net lease structure, tenants pay their bills directly to utility companies. Therefore, it’s harder for the landlords to manage usage.

Kimco plans to spend the year conducting an in-depth analysis of energy usage at the Westlake site.

“That’s going to take a fairly significant amount of time this year. By the end of the year, we want to have a list of potential energy efficient improvements. Then, we’ll start to move forward to implementing the program in 2014 and will look to repeat it in other types of centers in the PG&E territory,” he said.