Commercial Property tenants and landlords often face the same question: Who absorbs the cost and who gets the benefits from energy upgrades?
The Owner
Profitability is the main concern of any property owner/landlord. Energy efficiency upgrades will
eventually lead the owner to profitability, but not without an initial financial investment. Tenants rather than owners will feel the immediate benefits of the upgrades such as increased efficiency and reduced costs but that can make it a harder pill to swallow when you are the landlord having to shell out the money. Owners will feel the short term pain for long term gain then as operating costs will ultimately be lowered when the building is efficiently consuming energy.
The Tenants
Tenants too have operating costs and rent is a big part of that. Tenants will pay for utilities too and they are structured into their lease agreements in different ways. How this is done often plays a big role in the relationship between landlord and tenant. For those tenants who pay flat fees per square foot, there is little to no incentive to use less energy or be energy efficient.
Green Leasing
Green leasing happens when the long-term energy benefits for the owner are synced up with the short-term financial benefits of the tenant. The ultimate goal is to help bring both parties together to save money and improve operational efficiencies.
With Green Leasing, owners and tenants agree on cost sharing of the efficiency upgrade, splitting the resulting savings until the investment is paid back over a predetermined period of time.
Green Leasing has a number of benefits:
Buy-in of all parties involved.
Facility value is increased in the long term while also lowering operational costs in the short term.
The owner and tenant showcase their commitments to energy efficiency.
Green leasing is used as a way to negotiate new or existing lease agreements to entice new rentals and the return of existing tenants.
Everything Electric Company can advise you on green leasing solutions for buildings that you own. We will work with you to come up with solutions. Find out more by calling 778-988-1223.
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