A story from the New York Times, published March 3rd underscores what we have been saying for over a year: green leases — or commercial leases that draw on the benefits of sustainability — are attracting the attention of both tenants and investors.
The story, “Seeing the Investor Value in Being Green,” reports that a German real estate investment company, Jamestown Properties, has proclaimed that it will go “green” in its entire $4 billion portfolio of buildings here in the U.S. According to the New York Times, Jamestown will overhaul its existing properties by installing low-flow water fixtures and better lighting, by revamping heating, ventilation and air conditioning systems, and even by adding bike-share stations to some of its buildings. Jamestown expects to spend between $3 million and $10 million to retrofit its properties, the Times reported. (Click here to read the article.)
In fact and despite the troubled economy for real estate investment and finance, many developers are exploring the opportunities that come along with buildings that achieve LEED status. LEED refers to the Leadership in Energy and Environmental Design certification provided by the U.S. Green Building Council. (Click here.)
At the same time, many tenants are also interested in leasing commercial properties that help them to reduce their carbon footprints and promote the sustainability desired by their customers and employees. Likewise, this firm was recognized as a “Climate Action Leader” by the California Climate Action Registry,” for our efforts to achieve sustainability in our offices. And recently one of our partners, Elizabeth Watson, was recently named a LEED Accredited Professional by the U.S. Green Building Council — a rare recognition awarded to only 50 practicing attorneys in California. Elizabeth is a member of the firm’s Real Estate and Climate Change and Sustainability practices. She also serves as pro bono counsel to the Los Angeles Chapter of the U.S. Green Building Council. (Click here.)
Green leases in commercial development aren’t just good for the planet, for our clients or for our clients. To date, more than a dozen California municipalities, including Los Angeles and San Francisco, and many others around the country have passed green building ordinances that require developers to meet certain “green” and sustainability standards for all new developments. (Click here for a list of some of the participating cities, towns and counties in California.)
While some developers may balk at the short term costs of building “green” and retrofitting their existing buildings, they can achieve significant and long-term reductions in costs and expenses borne by building owners and tenants. At one of Jamestown’s buildings, for instance, it will save approximately $350,000 within one year as a result of new efficiencies, according to the Times.