Asking your Landlord to “Green” your space
It is an interesting problem that a landlord faces when a tenant asks about green upgrades for the commercial or residential they would like to rent. This is the first of several articles where I plan to discuss this problem from both ends.
Tonight we will pretend we are the landlord. The process of providing green upgrades to the space and general energy efficiency improvements can usually only be justified on a return on investment basis (ROI). As such to the landlord it is critically important that there be some cost savings to the building and maybe a premium to the rent that can be charges. The later is less likely in the current environment.
One way to help the ROI calculation is with the help of government incentives. Here is a handy and well thought out page that summarizes the current crop of these programs by location (http://www.dsireusa.org/index.cfm?&CurrentPageID=7&EE=1&RE=1). Also there are any number of fairly simple projects that have a ROI of less than 2 years, a winning number in most accountant’s books.
The other side of this problem is that the tenant either wants or must have in the case of government agencies some guarantee of a certain level of efficiency or compliance to another standard like LEED. There is a significant risk for the landlord in this case. In an ongoing series on the Green Real Estate Law Journal (http://www.greenrealestatelaw.com/2009/02/legal-risks-of-green-leases/) there is a fairly thorough explanation and assessment of these risk and issues. I would encourage all landlords contemplating the world of green leases to read this series and understand it. It would also be helpful for all potential tenants to read it as well to better understand the landlord’s concerns as well as being prepared in what you can negotiate away to get the deal done.
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