Press Release: Green Leases Study


Sacramento, CA – May 5, 2009 — The California Sustainability Alliance, a market transformation program managed by Navigant Consulting, Inc. (NYSE: NCI), has released its newest report Greening California’s Leased Office Space: Challenges and Opportunities.   The report provides information to policymakers and market participants about the pivotal role green leasing plays in achieving the resource efficiency, environmental, and societal benefits of green buildings; and outlines the changes that need to be made to policies, programs, and practices in order to establish green leasing as a standardized practice in California.

Office buildings currently use ten percent of all energy consumed in the State of California.  While this sector has been targeted by state energy efficiency programs for many years, there is still significant untapped potential.  The report found that the primary barrier to greening California’s commercial office space is the fact that ninety percent of all office space in California is leased.  Under many lease transactions, owners are not economically motivated to invest in building retrofits because the economic benefits of such retrofits flow to the tenants.

The report profiles California’s real estate market and outlines how imbalanced benefit distribution, or “split incentives” in lease transactions create barriers to greening office space.  The report also details how the leasing process can be leveraged in order to help willing owners and tenants enter into a “green lease”.  The report further recommends a broad range of strategies for accelerating green leasing in California – from establishing consistent statewide standards and definitions of “green”, to documenting and publicizing the costs and benefits of green buildings (also known as the green building value proposition), implementing building labeling, and modifying state and local policies, ordinances and utility programs to recognize the different needs and interests of landlords and tenants under various types of lease structures. The report also includes a copy of The Green Leases Toolkit 2.0.

“We see many more tenants actively seeking green space, and most new commercial buildings are being designed to very high standards,” explained Sean Ivery, a Director in Navigant Consulting’s Construction & Real Estate Practice and co-author of the report.  “We hope this report will provide additional guidance for corporate sustainability programs as the desire for higher performing office space continues to drive demand.”

To download a copy of Greening California’s Leased Office Space: Challenges and Opportunities, go to the California Sustainability Alliance’s website:

The report was prepared by Navigant Consulting’s Energy and Construction & Real Estate Practices with the assistance of the Alliance program’s Green Building Advisory Committee which includes senior real estate officials and key market participants from across the state of California.  Study contributors include:  Daniele Aquino, Sustainability Manager, Thomas Properties Group; Roy McBrayer, Deputy State Architect and Program Manager - Green Action Team, California Department of General Services; William Swettenham, Senior Vice President, CB Richard Ellis; and Stephen Greger, Green Loss Control Director for Fireman’s Fund Insurance Company.

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