An article, “Green Issues to Consider in Drafting and Negotiating Office Building Leases,” by Seyfarth Real Estate partner Adam Walsh was published in the March 6 issue of Bloomberg BNA’s Real Estate Law & Industry Report. In the article, Adam discusses the finer points involved in drafting contracts for office buildings with Leadership in Energy and Environmental Design (LEED) designations and U.S. Green Building Council (USGBC) ratings.
According to the article, it is becoming increasingly common for owners of buildings to request LEED designations or USGBC ratings, both with new and older complexes. Accordingly, this shift requires owners to “green” office building standard lease forms. Adam identifies the primary issues surrounding the contract changes as being with “construction, tenant operations and maintenance, and the ability of landlords to pass through ongoing green operating costs and expenses to tenants.”
“Although the lease provisions remain new and will require an active dialogue between the parties, the good news is that as the provisions become more common, a market set of compromise positions is developing that often works for both parties,” Adam remarks.