How to Get Your Landlord to Go Green

How to Get Your Landlord to Go Green

In an effort to help retailers save money on real estate costs (and be more environmentally responsible), the Retail Industry Leaders Association (RILA) and the Institute for Market Transformation (IMT), a non-profit dedicated to promoting energy efficiency and green building, have released a retail green lease primer. The document, the result of a two-year collaboration between retailers and retail center landlords, discusses potential lease modifications retail tenants can consider in an effort to optimize energy and water use and minimize waste at their stores.

The primer advises retail tenants to agree to longer-term leases—a measure landlords are sure to love—since staying in the same location both cuts the financial and environmental costs of new store build-outs and might make landlords more amenable to instituting energy efficiency features to hold on to longer-term tenants. RILA and IMT also tell retailers to think twice about committing to triple net leases, versus regular ones, since a triple net lease tenant is essentially responsible for all utility expenses, taking away any incentive for the site developer to build “green.”

Retailers might also want to consider letting their landlords recover capital improvement costs in exchange for improvements that deliver reduced operating costs. Another option would be agreeing to pay for small-scale efficiency improvement projects as part of Common Area Maintenance (CAM) charges. Such improvements may include new building controls, water conservation measures and sub-meter installation.

“This document will be an important educational tool to help facilitate internal conversations and negotiations between parties,” said IMT’s Program Director for Commercial Real Estate Engagement Adam Sledd in a statement.

To view the entire document, please click here.

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