Green leases (also known as aligned leases, high performance leases, or energy efficient leases) align the financial and energy incentives of building owners and tenants so they can work together to save money, conserve resources, and ensure the efficient operation of buildings. Energy and environmental performance are emerging as key benchmarks in how commercial real estate buildings are judged and priced in today's market. According to a recent survey, 88% of corporate and developer respondents expect to own, manage or lease some green properties five years from now. Learn about the importance and value of environmental sound practices in property management, and about trends, certification programs, and other resources for the green property manager.
We've already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require the member's nar.realtor login.
Looking for more formal training in green property management? NAR's Green designation has a property management track. The Green designation provides real estate professionals with the knowledge and awareness of green building principles applied in residences, commercial properties, developments, and communities so that they can list, market, and manage green properties as well as guide buyer-clients in purchasing green homes and buildings.
For more information, visit the Green Resource Council webpage
Why Go Green?
Johnson Controls and Microsoft Join Forces to Create Healthier, Safe, and More Sustainable Buildings (Microsoft, Dec. 15, 2020) – The National University of Singapore turned to Microsoft to not only help refresh their aging infrastructure, but to figure out how to get each of their 260 buildings to communicate with one another. A state-of-the-art computer simulation program allows the team to design a campus with less traffic, more private space, and will help the university meet its goals of becoming carbon neutral by 2030.
The Critical Relationship Between Buildings and Sustainability for the Future (Buildings.com, Dec. 11, 2020) – The built environment accounts for 40% of the world’s emissions, which is why those at Schneider Electric believe it is where we win or lose our fight against climate change. The COVID-19 pandemic has slightly lowered these emissions, but also proved more than ever that what is needed, both in sustainability and building design, is a drastic change to the status quo.
Green Tenant Amenities (Buildings, Oct. 1, 2019) E – Implemented correctly, your amenities will refresh your building and highlight your commitment to your tenants and the environment.
The Case for Investing in Sustainable Buildings (Green Money, Jul./Aug. 2019) – Making sustainable upgrades to properties old or new can be beneficial in terms of cash flow. Efficiency improvements can reduce operational costs through lower utility bills and maintenance costs; lower exposure to energy price risk; or lower insurance and debt cost. A property with a green building certification can result in higher occupancy rates or increased tenant satisfaction, which translates into longer leases, higher demand or a rent premium.
Frameworks for Simplifying Sustainability (Journal of Property Management, May 1, 2019) E – Property managers can simplify sustainability for their teams if they begin with the view that each building is a set of opportunities in performance improvements and cost-effective retrofits, waiting to be discovered. At some point, sustainability is about the efficiency of each light bulb, the optimization of each set point, the diversion of each empty Coke can from the landfill.
Why Green Leases Will Bloom After the Pandemic (Commercial Property Executive, Jul. 16, 2020) – The COVID-19 pandemic has changed the meaning of “safety” in buildings - air circulation, elevator capacities, and drinking fountains are now just as important for our health and safety as properly installed wiring. With the form and function of every property being examined, many are hoping that this reexamination includes sustainably practices as well – “green leases are likely to register as a useful tool for addressing both health and cost-reduction measures.”
Looking Beyond COVID-19: Green Leasing – Action, Adaption and Adoption for Commercial Offices in China (Cushman & Wakefield, Jul. 7, 2020) – Cushman & Wakefield have identified four key factors driving Green Leases – decreasing technology costs, smarter buildings, demand for green space, and green government initiatives. With offices already urging adaption and adoption of new green practices, those at Cushman & Wakefield believe that the wellness aspect driving many green property trends will pair with COVID-19 precautions for quick adaption.
Green Leases & Sustainable Capital Investment in Buildings: The Split Incentive Dilemma (Verde Exchange, Sep. 4, 2019) – One of the major drivers of green leases is GSA (General Services Administration). They have the highest green leasing requirements I have seen. For example, they don’t want to leave space in the building that’s not EnergyStar. They will give you a certain amount of time to get there, and if you don’t, you are paying a penalty.
How Green Leases Help Achieve Green Buildings (FacilitiesNet, Mar. 4, 2019) – To remain competitive and resilient, leases need to be structured in a way that enables a building to be highly efficient, incorporate health and wellness, and have a lower carbon footprint.
Group Calls for Reset of Energy Efficiency Letter Grades for Buildings (Habitat Magazine, Dec. 21, 2020) – In an open letter to Mayor DeBlasio, citizens of New York City cited their concerns with the city’s energy efficiency rating system. The group believes that the current rating system is not completely accurate, noting that the system does not take into account the density of apartment complexes nor does it have room for residential buildings with commercial spaces, among other complaints.
It Takes a “Surgeon” to Cut a Building’s Emissions (Scientific American, Dec. 4, 2019) – As cities across the country ramp up efforts to combat climate change, it has become challenging for building owners with relatively limited insight into building operations to reduce building emissions. In this environment, it is imperative for building owners to partner with technology providers to better evaluate building performance, identify energy reduction opportunities and reduce operating expenses in the most holistic manner.
Target Installs 500th Solar Rooftop (Progressive Grocer, Nov. 18, 2019) – So far, the rooftop installations have added more than 240 megawatts of solar across the buildings, equivalent to powering nearly 46,000 U.S. homes. Target says that each project generates enough energy to offset 15% to 40% of a property's energy needs.
No Matter the Property Type, It Pays to Invest in Energy Efficiency (Commercial Property Executive, Jul. 23, 2019) – The benefits of energy efficiency retrofits in the multifamily sector are well documented. In addition to operational cost savings, owners can expect to realize lower vacancy rates and higher property values, while residents benefit from lower utility bills, a healthier indoor environment, and increased comfort.
Other Ways to Green Your Management
Fabege First with 100 Percent Green Financing (Yahoo! Finance, Dec. 21, 2020) – One of Sweden’s largest borrowers has committed to “fully green financing,” aiming to be carbon neutral by 2030. While Fabege is already a global leader in sustainable real estate – every single one of their investment properties is sustainable – the company sees real estate as the sector with one of the biggest environmental footprints. For this reason, they see green loan agreements as another important facet of sustainability.
New Multifamily Project Includes Energy Storage as an Amenity (Building Design + Construction, May 29, 2020) – A Utah apartment complex took “green amenities” to a whole new level – each of the 600 units come equipped with a battery hooked up to the building’s solar panels. The solar-powered batteries, which are monitored 24 hours a day, not only serve as emergency power backups, but also help manage high energy use.
NYC's One World Trade Center Leads the Way in Green Architecture (Thomas.net, Nov. 20, 2019) – The building collects 100% of its stormwater runoff on-site where it is stored in high-efficiency evaporative cooling towers, which maximizes water efficiency overall. The water is claimed and re-used for building cooling purposes as well as fire protection, supplemental cooling, and irrigation for the complex's extensive landscaping needs.
Parking Garages Transform Urban Environments with Living Green Walls (GreenRoofs.com, Oct. 9, 2019) – Living green walls can completely transform the façade of otherwise bare parking structures, turning them into a central design element in developments rather than something to be hidden away.
What’s more, living green walls can have significant environmental benefits, including helping to make cities quieter by introducing more shade, evaporative cooling, and sound absorption.
The Green Revolution Spreading Across Our Rooftops (The New York Times, Oct. 9, 2019) – The vegetation on a living roof cools the surrounding air through evapotranspiration, the process in which moisture in plant leaves evaporates into the air, essentially working like an outdoor air-conditioning system. In addition, the increased insulation and decreased need for air-conditioning means less overheated air is put back into the surrounding environment.
Websites, Journals & Certification Programs
Journal of Green Building — A research journal, focused on green building, in which half of the articles are peer-reviewed
Journal of Sustainable Real Estate — This independent journal intends to foster truth surrounding the myriad questions of how to become more efficient, healthier, and more productive while recognizing that economics and regulation will drive the sustainable real estate market
US Green Building Council — Committed to a prosperous and sustainable future for our nation through cost-efficient and energy-saving green buildings
Energy Star for Buildings and Plants — Created in 1992 by the EPA, the Energy Star program has since gone international and is one of the leading marks for energy efficiency in the world for consumer goods, homes and buildings
Sustainability — BOMA International's green resource page
Green REsource Council — The website for NAR's Green designation
LEED Rating Systems — The leading commercial building certification standard in the United States, sponsored by the US Green Building Council
Green Lease Library – Created by the Institute for Market Transformation, this is a centralized site for commercial green leasing resources.
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
The Green Building Bottom Line (Kindle, eBook)
Conservation for Cities (Kindle, eBook)
Green Buildings A to Z (Kindle, eBook)
Reinventing Green Building (Kindle, eBook)
Sustainable Energy Systems in Architectural Design (Kindle, eBook)
Sustainable Facilities (Kindle, eBook)
Sustainable Property Development (Kindle, eBook)
Books, Videos, Research Reports & More
The resources below are available for loan through Member Support. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Member Support at 800-874-6500 for assistance.
Routledge handbook of sustainable real estate (Oxford: Routledge, 2018)
A Practical Guide to Green Real Estate Management (Chicago: IREM, 2009) NA 2542 K6
Lease Guide: Guide to Writing a Commercial Real Estate Lease including Green Lease Language (Chicago: BOMA International, 2008) HD 1384 T23
Green Retail: Selected Readings, Oct. 2007 (Washington DC: Urban Land Institute, 2007) NA6230 Ur1g
Green Buildings: Selected References, September 2006 (Washington DC: Urban Land Institute, 2006) NAC 250 Ur1gb
Green Buildings Pay (New York: Spon Press, 2003) NA 2542 G72
Routledge Handbook of Sustainable Real Estate (Abingdon: Routledge, 2018) HD 1390.R684 2018
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