1. Growing the Bottom Line with Energy-Aligned Leases
Add Brenna, same process as above
Presented by:
Holly Carr, U.S. Department of Energy John Harrison, Starbucks Paul Mathew, Lawrence Berkeley National Lab

2. About this session Introductions. (10 mins.)
Name, organization, how long you’ve been in this business.
Primer: Why care about energy costs in leased spaces? (10 mins.)
Learn from a leader: How Starbucks manages energy costs in leased spaces. (20 mins.)
Group exercise: Challenges and opportunities with sample energy-aligned clauses in leases. (30 mins.)
Call to action: Opportunities to learn more, network with peers, and get recognized. (10 mins.)
Wrap up. (10 mins.)

3. What is an energy-aligned lease?
Energy-aligned “Green” leases equitably align the costs and benefits of energy and water efficiency investments between building owners and tenants.
Landlord installs new high efficiency RTU.
Tenant pays incremental upcharge.
Tenant uses less energy, pays lower bills over life of lease.
Landlord installs solar on rooftop.
Tenant purchases onsite power.
Tenant pays lower utility bill, reduces GHG emissions.

4. Guiding principles Tenants and Landlords should:
Know how much energy their buildings use.
Pay for energy upgrades commensurate to the financial benefits they receive.
Realize savings from cost-effective maintenance and behavioral energy best practices they undertake.

5. Benefits of energy-aligned leasing
Reduce utility bills up to $0.51 per square foot*
Increase NOI
Reduce occupancy costs
Increase building occupant satisfaction
Improve landlord-tenant communication and relationship
*Feierman, Andrew What’s in a Green Lease? Measuring the Potential Impact of
Green Leases in the U.S. Office Sector. Institute for Market Transformation.

6. Leading organizations are doing it
Shorenstein: ‘Flip the Switch’ program
Regency Centers: Solar PPA for tenants
Prologis: Accessing tenant energy data
Tower Companies: Energy-aligned lease clauses
UC Berkeley: Departmental energy billing
Commonwealth Partners: Tenant energy program
Whole Foods Market: Solar on Leased Stores Rooftops

7. How Starbucks Does It

8. Starbucks Leasing Standards
Sub metering
HVAC efficiency and right sizing
Exterior lighting
Landscape standards and watering
Envelope standards for build-to-suit
Provisions for roof use (PV panels)

9. Starbucks Internal Process and Stakeholders
Dealmakers (store dev managers/brokers)
Construction Project Managers
Designers/AOR’s and EOR’s
Facility Service Managers (Cx Agents)
Standards & Sustainability Team (LEED®)
Deal/LL Work Letter
Document
LL Turnover
Design & Build
Commission

10. Starbucks Successes and Challenges
Enforcing LL Performance
Sizing tools for lease negotiations
Turnover and acceptance of HVAC, etc.
Interface with whole building HVAC systems
LEED Certification
Recycling
- Enclosures
- Service set up

11. Starbucks Lessons Learned
Get your base standards solidified
Keep it simple!
Communicate and educate
Have ambitious goals
Track and report performance and progress
Celebrate and share success

12. Starbucks Brand PPT 2014 template
Starbucks Confidential – INTERNAL USE ONLY
Starbucks Brand PPT 2014 template
Surpassed 1,200 LEED®-certified stores in 20 countries/US Territories, more than any other retailer in the world
Internal Use Only

13. GROUP EXERCISE
You have been asked to include several energy-aligned lease requirements in a new lease.
(refer to handout)
Would you agree to these requirements?
If not, why not? What concerns do you have?
How might you modify these requirements?

14. Call To Action

15. Green Lease Leaders Program
Initiated in 2013 by U.S. Department of Energy and the Institute for Market to:
Define best practices in green or energy-aligned leases
Provide green leasing resources and technical support
Recognize tenants, property owners and brokers implementing leading practices in green leasing
Drive higher building energy performance in commercial, retail, and industrial buildings

16. Who are the Green Lease Leaders?
29 Landlords, 6 Tenants, 7 Brokers, 5 Team Transactions
Over 1.3 billion SF of commercial space represented
$24 M annual energy cost savings

17. Who are the Green Lease Leaders?
3 team transaction awards

18. Key features Explicit portfolio commitment
Portfolio can be regional, fund-based, or nationwide
Two-level recognition scheme
Silver (Foundational)
Documented with standard lease language and/ or corporate guidelines
Gold (Foundational + Implementation)
Documented with proof of execution for each prerequisite and credit pursued
Case study (highlight single building or tenant space meeting recognition requirements)
Flexibility with menu of credits
Website, resources and templates

19. What are the requirements for tenants?
Provide sustainability/energy contact to landlord
Require minimum energy efficient fit-out:
Estimate energy use
Meter tenant energy use
Light efficiently
Share utility data with landlord
Purchase efficient equipment
Prerequisites
Track tenant space energy use.
Track tenant space water use.
Request building ES score from landlord
Ensure transaction management team receives energy training
Implement tenant energy management best practices
Purchase on-site renewables if offered by landlord and competitively priced
Accept cost recovery for EE upgrades that benefit tenant.
Include requests for energy information in Site Selection Questionnaire.
Innovation in Leasing: Encourage advancement of energy efficiency in leased spaces with creative solutions not addressed in the Green Lease Leaders criteria
Credits (Choose at least 5)

20. How do I become a Green Lease Leader?
Get a green lease check-up
Join as a participant
Update organizational leasing practices
Establish policies and revise standard documents (Silver)
Execute green leases and develop a case study (Gold)
Apply for Green Lease Leader recognition

21. What’s the timeline? Contacts: Alex Harry, IMT – Alex.Harry@imt.org
NOW: Technical Support Available
September 2017: Online application Opens
March 2018: Online application Closes
Spring 2018: Annual Recognition Event
Contacts:
Alex Harry, IMT –
Holly Carr, DOE – Paul Mathew, LBNL --
Deb Cloutier, JDM Associates –

22. Tenant Impact in buildings
The Landlord-Tenant Energy Partnership (LTEP) is a four year initiative led by the Institute for Market Engagement (IMT), Retail Industry Leaders Association (RILA), and International Council of Shopping Centers (ICSC). There is no cost to participate – join a growing community of 34 of the largest retailers and landlords.
Collaboration Areas
Energy-use transparency (submeters)
Utility rebate access
Green build outs
Renewable energy
Activities
Virtual workshops with tenant and landlord peers
Expert consultations
Central information hub to share resources
Private website discussion forums
Current programs Submeter Pilot | Utility Incentive Rebate Pass Through | Green Lease Recommendations | Energy Star for Tenants | Landlord Tenant Invite Only Forum Discussions
For more information:
Audi Banny, Interim Director of Market Engagement |

23. Questions?
Thank you!

24. Contact Information
Holly Carr, U.S. Department of Energy
John Harrison, Starbucks
Paul Mathew, Lawrence Berkeley National Lab