Commercial Tenants

Successes in Sustainability: Landlords and Tenants Team Up to Improve Energy Efficiency

Case study examples of how landlords and tenants are tapping into the power of collaboration to overcome barriers to high-performance buildings.

Download the Energy Star document

Successes in sustainability: key points and summary

A summary of the key points taken from the Energy Star document referenced above

Helping Tenants Score Big in Energy Efficiency

Hines developed and launched the internally focused HinesGO (GREEN OFFICE) program to measure and reward sustainable practices in the firm's more than 200 offices worldwide. Tenants began to ask property teams for ways to improve sustainability in their leased spaces.

Hines recognized the value of interacting with tenants around sustainability — in terms of fostering stronger landlord-tenant relationships, as well as the energy and environmental benefits for the company’s portfolio

Owner Challenge

Seeks opportunities for positive interactions with tenants that deepen relationships, enhance customer service, and achieve sustainability objectives

Tenant Challenge

Seeks help to make their office space more sustainable, validate existing practices, and gain recognition for achievements

Owner Benefit

Use recognition as a powerful tool to motivate tenants to take efficiency and other sustainability actions.

Tenant Benefit

Help to build strong landlord-tenant relationships. Tenants are eligible to be awarded the GREEN OFFICE designation

Building

All leased offices in Hines-managed buildings

Lease type

Range of lease types represented across more than 100 million square feet

Owner / PM

Hines

Tenant

KPMG LLP, and Various Tenants

A building in Philadelphia's Center City, offered much more than an opportunity to reduce operating expenses — it had the potential to position Reed Smith as a sustainability leader and to set an example for the community

Owner Challenge

Wants to maintain a top-performing, competitive building

Tenant Challenge

Wants to differentiate itself as a thought leader by committing to the health and wellness of its employees, its community, and its environment in a fiscally responsible way.

Owner Benefit

Benefit is a strong relationship with a new tenant and a more sustainable and valuable tenant space within an ENERGY STAR certified building

Tenant Benefit

Estimated that it will take Tenant less than 2 years to earn back in energy savings the less than $300,000 initial investment, with savings accruing every year after that through the remainder of the 16-year lease*

Building

Three Logan Square, Philadelphia, PA

Lease type

Modified Gross (Tenant is billed by landlord for actual energy use)

Owner / PM

Brandywine Realty Trust

Tenant

Reed Smith LLP

*NOTE: A projected 35% reduction in energy use compared to standard, code-compliant systems:

Basic upgrades:

  • Lighting
  • HVAC optimization
  • plug and process load management

Best Practices:

  • daylighting
  • occupancy sensors
  • ENERGY STAR equipment
  • smart power strips
  • variable frequency drives
  • high-performance lighting package

NEEA needed to find a new home in downtown Portland, Oregon, one that would allow the organization to create a showcase energy-efficient, green office. When the team was ready to hire a broker, they looked beyond the standard qualifications to find a partner who understood the organization's unique goals and who would seek a property owner and manager willing to collaborate on and support NEEA's energy performance focus.

Owner Challenge

Sought to position the Commonwealth Building as a green, high-performance building.

Tenant Challenge

Searching for a highly energy-efficient space that would allow the organization to remain fiscally prudent on behalf of its regional utility and energy-efficiency stakeholders.

Owner Benefit

Funded the upgrades — even those that cost more than an agreed-upon budget — because it felt confident that the investment would increase the value of the space and make it attractive to future tenants

Tenant Benefit

Embarked on a unique negotiation process that ultimately benefited both Owner and Tenant

Building

Commonwealth Building, 421 SW Sixth Avenue, Portland, OR

Lease type

Triple Net (Tenant pays energy bills directly to the utility)

Owner / PM

Unico Properties

Tenant

NEEA

Vornado Realty Trust, one of the largest commercial real estate investment trusts in the United States, is a leader in sustainability and energy efficiency. Realizing that energy use in common areas was going down but energy use in tenant spaces — accounting for up to 70% of energy consumption — was staying flat.

Vornado is helping its tenants understand their energy consumption and make improvements to reduce usage. Their Energy Information Portal (EIP) where tenants can connect their actions to actual energy savings, gaining a way to understand the impact of their behaviour and motivation to improve.

Owner Challenge

Wanted to engage tenants in achieving and maintaining top energy and environmental performance across the portfolio.

Tenant Challenge

Lacked insight into their own energy consumption and did not have a meaningful way to track usage.

Owner Benefit

Save energy costs by reducing energy use with smart facilities management and sustainable improvement, and to better serve tenants.

Tenant Benefit

This approach breaks down the figurative walls between landlord and tenant to benefit both and the environment.

Building

Many buildings

Lease type

Modified Gross (Tenants are billed by landlord for actual energy use)

Owner / PM

Vornado Realty Trust

Tenant

Many groups

Lessons Learned to support Tenants to score big in energy efficiency:

  • Use recognition as a powerful tool to motivate tenants to take efficiency and other sustainability actions
  • Capitalize on the opportunity to lead by example
  • Landlords and tenants can engage on energy efficiency regardless of lease structure
  • Engagement around sustainability can help to build strong landlord-tenant relationships

Lessons Learned for a good relationship with Tenants for energy reduction behaviour:

  • Closely track energy data, particularly sub-metered data, to identify trends and make strategic time and resource investments.
  • Landlords: Motivate tenants to take action by making energy and cost data available and understandable.
  • Landlords: Seeing your role as an “ambassador” to tenants for energy and environmental opportunities may increase tenant willingness to engage in green initiatives.

Lessons learned for Tenant with no sub-meter based on above cases:

  • Take advantage of a move or lease renewal to design and build a green, high-performance space.
  • Leverage the direct financial benefits of green, efficient space and, more importantly, the potential positive impact on employees, organizational brand, and community relations.
  • Designate a motivated and knowledgeable sustainability advocate who is adept at communicating benefits to all levels of the company.
  • Tenants: Consider asking your landlord for help in finding guidance and partners in your green build-out.

Lessons learned in Tenant who pay utilities based on above cases:

  • When seeking a new space, form a selection team that includes senior management and staff. Make sustainability a key goal for the team.
  • Choose brokers and other external partners who understand the importance of achieving an organization’s sustainability goals.
  • Identify ways to achieve efficiency and sustainability goals that benefit both tenant and landlord, be willing to negotiate, and document agreed-upon measures.
  • Be responsive to the efficiency and sustainability ideas prospective tenants and landlords bring to the table.
  • Consider how efficiency improvements in tenant spaces — at build-out and beyond — can increase a building’s and organization’s value and attract and retain tenants.

Join the Challenge

Support local business taking climate action in York Region:

Reesor's Good Food
Toronto Waldorf School
Brain Power
Hope House Community Hospice
407 ETR
Riverside Natural Foods
Rouge River Farms
Faith & the Common Good
City of Markham
The Regional Municipality of York
York Region Food Network
Markham Fair
Alectra Utilites
Compugen
Town of Newmarket
Man Brothers
Tree Frog
Lake Simcoe Region Conservation Authority
City of Vaughan
Royal Envelope
Big Brothers Big Sisters of York
Irvine Generations
Holy Trinity Thornhill
Toromont Cat
Ontaio Trillium Foundation Natural Resources Canada BOMA Toronto