Feds Must Lease Space in Energy Effecient Buildings

A new law went into effect in late December 2010, mandating that (with few exceptions) federal agencies may only occupy space in buildings that carry the U.S. EPA's ENERGY STAR label.

The Energy Independence and Security Act of 2007 formally went into effect on December 19, 2010. The General Services Agency (GSA), which handles leasing and property matters on behalf of the Federal Government, began integrating the new leasing requirements into negotiations and leases as of September of 2010.

A famous saying is "don't fight the Fed". This is generally attributed to fiscal policy, but the Federal government is the nation's largest commercial tenant, leasing more than 370 million square feet of space in 2008 alone. When the Fed says we only lease in ENERGY STAR buildings, commercial property owners and managers listen.

Sustainability is no longer a trend, it is now a policy.

Insurance Coverage for your Green Building Upgrades

Yet another indication that the "Greening" of corporate America is here to stay; Fireman's Fund Insurance Company, which already offered "green insurance", now offers expanded insurance coverage to property owners for their investments in "green" building upgrades.

Specifically Fireman's Fund now provides "Green Financial Incentive Coverage", which provides protection against the loss of financial incentives linked to green installations or upgrades (i.e., tax incentives, loans, utility rebates). In the case of a building loss, Fireman's Fund would cover any "incentive" losses for two calendar years.

Large corporate users are already on the green bandwagon, however to date we have not seen medium or small businesses put "sustainability" at the top of their priority list (in other words; they like the idea, but don't want to pay the additional 20% for sustainable products).

More Evidence of the ROI on Green Buildings

Great posting on Clean Techies about the financial reasons for commercial property owners to invest in greening their buildings.

2100 Franklin Steet, Oakland Ca. LEED CS Gold (v1)

The posting: Does Green Building Make Cents quotes Nils Kok, professor at Maastricht University in the Netherlands and a visiting scholar at UC Berkeley, who along with two other authors, wrote an analysis of the financial performance of green office buildings in the United States. Unlike other studies which are often based on engineering estimates, this report was based on actual market transactions.

Some of the highlights from the study found that green buildings:

• Have rental rates that are two percent higher per square foot than otherwise identical buildings
• Have a higher occupancy rate
• Likely have a positive effect on corporate image tenants
• Have longer economic lives, less depreciation and lower overall risk

The research paper can be downloaded (HERE).