What Are Green Leases and What Are the Benefits of Using Them?

Energy efficiency isn’t just a trend! Neither are green leases.

Working towards a more energy-efficient business is beneficial in a multitude of ways, both financial and environmental. Green leases are one of the ways you can work towards sustainability in your commercial real estate business. Our recent Facebook Live session with Karem Dale from Key HTX talked about this very topic!

What Are Green Leases?

Any commercial lease can be modified to become a green lease. Every green lease is different, so there aren’t particular clauses that all green leases include.

Green leases will likely require that both parties take on additional ongoing responsibilities relating to energy efficiency. But even with the extra responsibilities and collaboration, green leases are beneficial to tenants and landlords in a variety of ways.

How Can Green Leases Benefit Your CRE Business?

Improve Property Value

Green NNN leases frequently facilitate cost-sharing for energy-efficient building modifications such as renewable energy upgrades. You and your tenants will both benefit: you’ll be able to invest in energy-efficient upgrades that increase the desirability and value of the property. At the same time, your tenants will reap the benefits of lower utility bills once the modifications are complete.

Reduce Operating Costs

Most of the time, energy-efficient retrofits will pay for themselves in about three years. In addition to investing in energy-efficient building modifications, there are simple ways to reduce operating costs that you can include in your green lease. For example, you can require that tenants close their blinds when the sun is directly hitting their windows, thus saving on cooling costs in the summer.

Obtain Certifications

Impress Tenants

Lead the Way to a Sustainable Future

To learn more, check out BOMA’s Green Lease Guide, which provides an in-depth model green lease agreement for commercial real estate owners. And, if you need help managing tenants and leases, check out STRATAFOLIO! We are focused on helping our customers reduce costs and improve the bottom line.

Originally published at https://stratafolio.com on October 22, 2020.

STRATAFOLIO is an online software solution that provides real-time data analytics for commercial real estate portfolios in an intuitively designed dashboard.