Asking your Landlord to “Green” your space

February 19, 2009 at 11:46 pm 2 comments

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.

As always I thank you for your time and interest. Please take the time to Digg, Stumble Upon or add to the other social network of your choice to help me spread the word about these issues. Please forward any questions or suggestions to: askthefm@gmail.com

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Entry filed under: Compliance, Planning. Tags: , , .

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2 Comments Add your own

  • 1. Posts about Real Estate Law as of February 20, 2009  |  February 20, 2009 at 5:08 am

    […] are sometimes out-dated and have no practical value.This course on real estate is real , workable Asking your Landlord to “Green” your space – askthefm.wordpress.com 02/20/2009 It is an interesting problem that a landlord faces when a […]

    Reply
  • 2. Jude  |  March 2, 2009 at 3:58 am

    standard compliance…

    Intriguing idea, but I don’t know if I believe you one hundred percent….

    Reply

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