Leasing / Sustainability / Tips

Smart Office Leasing Strategies are Inherently Green

A skillful commercial real estate advisor approaches each transaction with the goal of obtaining the best deal and terms possible for their client, while also identifying a space that will maximize employee comfort and productivity. The advisor also plays a key role in influencing how the new office is built out and constructed, as well as where the office is located.

Sustainable business practices just happen to exist within the intersection of all of these goals; and if they do not, they should.

There are many opportunities throughout a commercial lease transaction to save the client money, and many of them also have the added benefit of being more responsible decisions, environmentally. Here are few examples of leasing strategies that easily align to accomplish both smart business and environmental goals:

THE LOCATION OF THE OFFICE

Having an office located within a high-density area makes a lot of business sense; it makes a company more accessible to a wider and deeper labor and customer pool, and associated car parking costs can be reduced by simply being connected to multiple mass transit options. The positive environmental impact of removing single-passenger cars from the road are many, and employees who bike or walk to the office are not only happier and healthier, but more productive while at work.

Giving preference to LEED Certified buildings is a great start to any office search, as the ownership has already taken the necessary steps to reduce energy, waste and water consumption, and improve indoor air quality.

THE OFFICE BUILD-OUT

By identifying an office that most closely matches the client’s desired configuration, a better rental rate can be negotiated since the landlord’s cost of construction will be lower. However, scaling back the scope of the tenant improvements also helps to reduce added pressure on new resources as well as minimizing construction waste that would have otherwise been sent to a landfill.

Boosting employee health and comfort also increases productivity, and one of the most effective ways to do that is to increase access to natural daylight. This is most easily accomplished in an open office plan along a window line, however if private offices are necessary, then utilizing glass will allow sunlight to permeate the office. If the tenant is located on the top floor of the building, skylights are often inexpensive and effective. Increasing the availability of natural sunlight simultaneously reduces the need for overhead lighting – and reducing energy consumption leads to cost savings.

FURNISHING THE OFFICE

With the sheer surplus of used and refurbished office furniture available today, purchasing new is most often a waste of money. The leasing broker has relationships with many furniture vendors who can provide an office tenant with quality used furniture, usually 30-50% below the cost of purchasing new. But in addition to saving the client money, the broker has again helped reduce pressure on raw materials and helped divert used furniture from a landfill. Additionally, new furniture can also be extremely toxic and can leach harmful VOC’s (volatile organic compounds), formaldehyde and other toxic chemicals into the air. Used office furniture will have already off-gassed these fumes and will therefore not negatively affect the indoor air quality of the office.

There are of course many, many opportunities to align sound commercial leasing strategies with sustainable business practices, especially when the real estate process begins with mindful focus and awareness. Identifying the intersection of these goals is not only SMART, but GREEN.

6 thoughts on “Smart Office Leasing Strategies are Inherently Green

  1. I have been thinking a lot about commercial leases through the lens of sustainable interior construction systems.

    I am the San Francisco technical rep for DIRTT Environmental Solutions, and prior to that I have a long history in this marketplace pioneering sustainable building practices.

    DIRTT is the leading manufacturer of factory-made, highly customizable, cost-effective, and fast interior partitions, doors, millwork, electrical and data distribution systems.

    DIRTT is focused on changing the way that interior construction is performed – from a site-built process to a software-driven extremely sustainable process. Within ten years I am certain this will be the norm – we are just approaching the tipping point where metal studs and drywall and site-built glazing systems will become out dated.

    What does this mean for commercial leases?

    Currently leases include a TI allowance which is basically an expensed operational cost for demo’ing and then rebuilding the interior of a leasehold space. It is assumed that 80% to 100% of the prior tenant’s construction will end up in the landfill – or at best be greatly down-cycled. This is huge loss of raw material, embodied energy, and time – all of which cost money.

    Because of our powerful software, the DIRTT system can be used to build out a commercial interior in a way that the life cycle is many decades – walls can be moved, reconfigured, re-skinned, re-purposed over and over at a small percentage of the original cost.

    This is “disruptive” to the leasing process. The TI cost becomes about 20% of what it is normally. The interior partitioning system becomes “a piece of equipment that belongs to the building” rather than being disposed.

    Benefits:
    * A building owner can offer short leases – a one year term can be profitable because the TI cost is so low.
    * A building owner can build-out elaborate “show spaces” and then reconfigure them in a few days to suit the tenant.
    * The DIRTT system depreciates as equipment in 7 years, not 39 years like construction, so the ROI is significantly improved.
    * In the inevitable down-cycle when tenants need to shed space, the reconfiguration for the sub-tenant is easy.

    Modular construction is clearly the future. What is interesting to me is that modular construction is going to cause a complete re-thinking of how leases are written.

    I have quite a bit of cost data on this.

    Interested in meeting to discuss?

    Here’s a 3 ½ minute video overview of the “DIRTT Approach” http://youtu.be/ZSwxWvbfzGg

    Cheers!
    Lewis

    • Hi Lewis, thanks for reaching out! I’ve actually heard your name a few times through my involvement with the U.S. Green Building Council’s Northern California Chapter where I’m the Vice Chairman. I believe we were going to hold an event at your showroom once?

      My office is downtown in the Financial District, feel free to shoot me an email and we can set something up: bosgood @ dunhillpartnerswest . com

      GO GIANTS!!!

  2. Pingback: Smart Office Leasing Strategies are Inherently Green | Ravtul's Blog - THE CONCEPTUAL PROJECT

  3. Pingback: Smart Office Leasing Strategies are Inherently Green | Ravtul's Blog - THE CONCEPTUAL PROJECT

  4. Identifying the intersection of these goals is not only SMART, but GREEN.

    Определение пересечения этих целей является не только умный, но GREEN.

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