For many of retail companies who lease their store space, the leasing arrangement creates split incentives which impede energy projects that would otherwise be logical investments. This is most true for smaller format retailers who are tenants of enclosed shopping malls.
These split incentives reflect areas of the lease where (1) one party owns and/or operates an energy-consuming system but the other pays for the energy consumed and (2) the tenant does not have transparency into its actual energy consumption.
Through the Landlord-Tenant Energy Partnership, RILA is working with the International Council of Shopping Centers (ICSC), the Institute for Market Transformation (IMT), and the Professional Retail Store Maintenance Association (PRSM) to reduce leasing barriers for energy projects and achieve energy and cost savings.
Learn more at www.landlordtenantenergypartnership.org.
RILA and its program partners are working to Develop Implementation Models, Educate the Industry, and Spur Adoption of Implementation Models by providing the following resources.
Implementation Model Case Study
- Regency Centers partnered with Trader Joe's to install a 253 KW solar photovoltaic system that offsets more than 65% of the store's energy use, at no installation or maintenance cost to Trader Joe's.
- Whole Foods Market drew on lessons learned from past ad hoc rooftop solar installations to develop a roll-out plan for around 100 new systems covering 25% of stores and warehouses. Developing standardized lease language with landlords was a key enabler.
Landlord-Tenant Collaboration Team Site - Retail and shopping center developer companies can access a contact list, discussion board, and resource library to facilitate collaborative projects. Contact Erin Hiatt to gain access.
Retail Green Lease Primer - Identify provisions in a standard lease agreement that can be modified to address both landlords’ and tenants’ goals, as well as the potential modifications to those provisions.
Sample Leasing Documents
- Sample Premises Questionnaire - View examples of how to align the base Premises Questionnaire with corporate sustainability strategy, goals, and policies to accompany or proceed the Letter of Intent.
- Sample Letter of Intent - View examples of how to align the base Letter of Intent (LOI) with corporate sustainability strategy, goals, and policies.
- Sample Work Letter - View examples of how to align the base Work Letter with corporate sustainability strategy, goals, and policies.
Other Resources for Retailers
RILA is working on creating a Mall Recycling Database to track recycling offerings and educational materials for various mall shopping centers. Email Erin.Hiatt@rila.org for more information.
Implementation Model Case Study
(DOE) Pyramid Companies implemented green leasing to promote energy efficiency in tenant retail spaces in its Destiny USA mall.
Sample Lease Language
- (IMT) Green Lease Guidance & Sample Language for Retailers - Outlines (1) green leasing first steps as well as (2) sample green lease langauge that retailers or landlords might incorporate into their leases to facilitate sustainability and operational efficiency improvements.
- (DOE) Retail Rooftop Unit (RTU) Lease Language - Example lease clauses to address RTU usage, operations, repairs, maintenance, retrofits, and capital replacement.
(IMT) Green Lease Leaders - Recognizes companies or brokerage teams that successfully implement "green" lease language into new or existing leases by awarding the designation "Green Lease Leader"