How Your Lease Can Make Your Buildings Better
This year, Spring brings a fresh start, not only from new buds on the trees, but also from continued vaccine rollout that is sparking fresh conversations about what a return to offices, schools, and other public gathering spaces look like. Many of these conversations, of course, focus on how space design and operations can address health and safety concerns. Can the ventilation system provide enough fresh air? Can the office layout shift to accommodate more flexible spacing and schedules? But who is responsible for investing in which improvements? For most landlords and tenants, the answer lies in the lease.
Many leases complicate the challenges of making upgrades, because they cause split incentives. This means that in many leases, one party (say, the tenant) might reap the benefits of an intervention (such as a healthier space and lower energy bills as a result of an HVAC upgrade) but the other party (the landlord in this case) would need to pay for it without seeing the direct benefits. Quite often, no action is taken, and both sides miss out on potential savings and health benefits.
The good news is that the lease doesn’t have to be a barrier to landlord-tenant collaboration. If you look at the application for IMT's long-standing Green Lease Leaders program, you'll see the template for a more productive lease. You can also look at past recipients to learn more about what this lease looks like in execution. The template's use also extends far beyond the recognition program itself, as you can see below in our new work kicking off with the City of Cincinnati.
If you'd like to learn more about how a green lease might work for you, feel free to reach out. As the world begins to reopen, we hope we can all take the opportunity to rethink how buildings can better operate to improve health, reduce energy, save money and better serve communities.
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