Adam Walsh and Christa Dommers Published in Commercial Investment Real Estate
“Leasing Green: Incorporate Sustainable Practices into Tenant-Landlord Contracts”

Adam Walsh and Christa Dommers’ article, “Leasing Green: Incorporate Sustainable Practices into Tenant-Landlord Contracts,” was published in the November/December 2009 issue of Commercial Investment Real Estate (CIRE) magazine. Their article discusses how commercial real estate property owners and tenants are adopting sustainability programs that affect various aspects of their business operations.

According to their article, when implementing sustainability programs, property owners and tenants must look at their real estate, both existing and future, to determine what changes are necessary or desired to further their sustainability goals. Since most corporate commercial real estate in the U.S. is subject to lease agreements, standard lease provisions may need to be modified to incorporate green concepts from both a tenant’s and a landlord’s viewpoint.

The authors recommend that landlords of existing buildings should re-examine their operating expense provisions to maximize potential recovery of green retrofitting costs. These provisions allow landlords to pass through the costs of operating the building to the tenants. They also note that tenants may be motivated to modify their existing space to incorporate more green features, however, current standard lease language may prohibit them from doing so. Therefore, it benefits landlords to supplement the standard lease rules and regulations that govern tenants’ operations in the building to cover sustainability concepts.