KEY CONSIDERATIONS FOR LANDLORDS
Driving Sustainability Initiatives: Sustainability-conscious landlords
often see green leases as a means to align their interests with those of
triple-net tenants. Landlords must have a well-defined green lease
policy, supported by leadership and understood by everyone from the
C-Suite to property management teams. Proactive engagement with
tenants on sustainability strategies and aligning these with the
tenant's construction needs can pave the way for smoother
negotiations and implementation.
Leveraging Property Teams: Property management teams and
building engineers play a vital role in the success of green leases. Their
day-to-day knowledge of building operations can guide the focus areas
of the lease and ensure that the sustainability goals are practical and
achievable. Landlords should engage these teams early to develop
effective green lease strategies, grounded in operational realities.
KEY CONSIDERATIONS FOR TENANTS
Prioritizing Sustainability Early: Tenants have greater leverage to
negotiate stronger green lease terms if they prioritize sustainability
from the beginning of their property search. This includes evaluating
the sustainability performance criteria of potential sites and the
landlord's commitment to environmental goals. Early engagement
with landlords allows tenants to influence the building's sustainability
improvements and ensures that green lease clauses are not an
afterthought but a core component of the leasing agreement.
Standardizing Green Lease Language: For tenants with corporate
sustainability targets, working with legal counsel to develop
standardized green lease language can streamline negotiations and
ensure consistency across multiple leases. This proactive approach
enables tenants to embed sustainability into their leasing strategy and
reinforces their commitment to environmental goals.
