Inventive ways to cultivate green tenants

The rules and regulations section of a lease is one way to encourage sustainability
Thursday, October 30, 2014
By Rebecca Melnyk

Although many tenants find value in creating sustainable office environments, over time, green behaviour can slip if property managers don’t foster this culture. However, according to some experts in commercial real estate, rules, as well as recognition, can fuel participation.

Green rules and regulations

According to David Thompson, partner at WeirFoulds LLP and an expert in commercial leasing, green leases are becoming a great way to create a sustainable cooperative between tenant and owner, but fulfillment of such principles can be actualized through the rules and regulations part of a lease.

“The rules and regulations section is the secret weapon of landlords, where they can subtly or obviously influence how their tenants do things,” says Thompson.

Issues relating to energy efficiency, lighting, recycling, HVAC systems, good pest management practices and preventing idling vehicles in the parking lot, are a few standards worth listing in this document.

Karsten Lee, associate at WeirFoulds, adds the idea of defining sustainability in the rules and regulations section has been tossed around at industry conferences; however, he hasn’t seen a big shift where landlords are using this section to their advantage.

Lee reasons that while some landlords update their standard lease, others have been using the same form for years. And as much as tenants may want to be green advocates, timing is always a factor.

“Updating a lease usually takes time, just as it takes time to convert old buildings and make them LEED certified or compliant,” he says.

At the moment, Lee notices more of a trend where landlords do want to upgrade their buildings, but share the cost with tenants. In this case, reality often translates to a matter of dollars and cents.

Rewarding green tenants

Still, whether or not rules are enforced, positive and creative encouragement is also key to igniting sustainable efforts.

John Smiciklas, director of energy and environment at BOMA Canada, says this encouragement extends to involving tenants in the process of a building, through renovations or upgrades, for example.

“Some tenants believe if they’re in a green building, they’ve done their part, but they may not understand as an organization they can do a lot to support the operations,” he suggests. Working in a BOMA BESt building should also extend to wanting to be a BOMA BESt tenant.

“It’s about finding ways to communicate with tenants, but also really engage with them at the same time,” he says, adding, “If you install efficient lighting, but tenants leave it on longer, you consume the same amount of energy.” There needs to be more informative outreach.

For tenants who are keen to initiate sustainable practices, Smiciklas says property management companies must often become a source of information for them, as well as celebrate their green achievements.

“There are a number of programs out there to recognize green buildings, but nothing that really recognizes green tenants,” he emphasizes.

A few real estate companies have set the standard on rewarding such commitment. Oxford Properties Group has implemented various creative ways of communicating and encouraging sustainability.

Broader engagement extends to sustainable lobby screens where the company addresses interesting facts around green buildings, achievements of the building and tips on what tenants can do to help.

The company has also executed green teams across its entire office portfolio that listen to the needs and interests of tenants to develop joint action plans.

The company has reached 30,000 customers through green teams and lobby events since 2012.

More specifically, providing tenants with a reading of their energy consumption, in the context of how they compared to other floors, is an event that unlocks a competitive spirit and rewards success by promoting an organization’s logo.

Green leases are also a new standard for Oxford. Although the lease is non-binding and doesn’t enforce green standards upon tenants, it still articulates Oxford’s commitment to sustainability as a landlord, while at the same time, including a few small requests of tenants.

Rebecca Melnyk is online editor of Building Strategies & Sustainability and Canadian Property Management.


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