The green building movement has blossomed in recent years as governments, institutions and corporations finance the construction of high-performance facilities.
However, in contrast to these owner-occupied buildings, multi-tenant office and retail spaces are yet to adopt many green design practices.
The problem, according to new research out of Rocky Mountain Institute’s Built Environment Team (BET), is common leasing structures create split incentives among tenants, landlords and owners.
Erik Bonnett, BET fellow and co-author of the research, says the issue should be familiar to anyone who has ever rented an apartment and had to pay the heating bill.
“If you’re paying the utility bill in your apartment in the middle of the winter you would probably want to close your window because that’s going to benefit you directly,” he explains.
“However, having a really efficient furnace or having solar thermal panels… would be great for you, but it’s the landlord that would have to make the investment.”
Bonnett says often landlords, “don’t want to do that because they’re not going to see the return on investment.”
There are other barriers, though, that have hindered the development of green multi-tenant buildings, says Caroline Fluhrer, BET consultant and co-author of the report.
“Most of the burden of creating a high-performance build-out falls on [the tenant’s] shoulders,” she says. Important decisions such as what kinds of lights to use and how to finish the interior are often left to people who -- despite best intentions -- may not be savvy about green building. That can compromise the end performance of the facility, according to the BET report.
“Another hurdle is that people assume if you’re going to do a new high performance building, it’s automatically going to cost more," Fluhrer says.
Much of BET’s work has shown this is not the case and that, in some instances, green buildings can cost less than traditional buildings, she adds.
The key to moving beyond these barriers, says Bonnett, is to communicate the value of high-performance building to all stakeholders.
“There’s a really large value to high-performance buildings that goes beyond just the energy savings,” he says, citing a recent CoStar report that found Energy Star and LEED office buildings command higher rents and have higher occupancy rates than less efficient buildings.
Bonnet says that tenants benefit from high-performance buildings as well, through increased worker productivity, better retail sales, and healthier work environments.
Getting to that point, explains Fluhrer, means extending the leasing process so critical decisions -- such as whether or not to install sub-metering -- are considered by all stakeholders.
That way, she adds, tenants, landlords, and owners can capture and share the many benefits of a high-performance building.
Read the full BET report
