Real Estate Articles
Should I Rent a Green Space?
Written by Brent Pace for Gaebler Ventures
Green building is all the rage in today's development world. So if you're an entrepreneur looking for space, should leasing a green space be important to you? Here we discuss some of the key issues to think about when deciding whether or not to lease a green space.
Leasing office space can be a daunting task, especially for your companies that may be moving out of the home-office and into a downtown office.
There are a lot of features thrown at you to try and get your interest including parking ratios, extension options, building amenities, and much more. One thing that is becoming increasingly common is that owners and brokers are trying to market green office spaces to tenants. How should you respond to this? What does it even mean to be a green office space? Let's find out.
"Green" is Meaningless - "LEED" Means Something
Make sure that advertisement of "green" space is backed up by facts. Today the industry standard for green is called Leadership in Energy and Environmental Design, or LEED. LEED is facilitated by the US Green Building Council (USGBC). Building owners have to certify through the USBGC as they construct their building to get the LEED certification.
Levels of LEED
LEED has many levels including Certification, Silver, Gold, and Platinum with Platinum being the highest level of ranking. As an aside, if you are offered a LEED Platinum space, and being in a super-hip green space is not absolutely essential to your business, then run away quickly! The premium for building a LEED Platinum space is huge, and you better believe it will be passed on to you.
Most LEED spaces, however are either the base Certified (which used to be called Bronze) or LEED Silver. These spaces may have a small premium in rents, but are likely to offer some utility savings. If you are able to negotiate a Triple Net (NNN) lease you may be able to realize some of this benefit.
Learn the Specifics
The LEED Certification is based on a point system. The more points the owner put into the project the higher the level of certification. For instance, having bike lockers for employees on the site of your office building can get you a point toward LEED Certification. As a potential renter of space, you should ask to see the entire list of points that the project garnered in its certification. Some of them will offer absolutely no benefit to you, but some of them will be a big deal.
Weigh Costs and Benefits
Finally, you have to weigh the costs and benefits. This is easier said than done. Many of the LEED Certification items will save you money. They will offer efficient water and utility systems, and will reduce your CAM costs. Other features won't save you money, but will create a better work environment for you. Some of these include the features in LEED buildings that promote the use of natural light in office spaces.
Weigh these benefits when you make your decision, comparing the LEED Certified building to a typical office building in the same area if possible. If employee retention and work environment is very important to you, you may find yourself enjoying a green space soon. If cash is tight, and you work on a shoestring budget, then you may end up passing on the green space for now in favor of a budget space elsewhere.
Brent Pace is currently an MBA candidate at University of California at Berkeley. Originally from Salt Lake City, Brent's experience is in commercial real estate development and management. Brent will have tips for small business owners as they negotiate their real estate needs.
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