JLL
At a Glance
Industry
Real Estate
Project Types
Commercial Energy Efficiency, Data Analysis, Financial Evaluation and Planning
Year
2024
Location
Chicago, IL
Summary
Radhika Handa identified and analyzed the potential cost savings and GHG emission reductions that can be gained from implementing green leases which will aid JLL in sustainability consulting projects for clients.
Goals
As the commercial real estate industry is under regulatory and market pressures to decarbonize assets, research is increasing on green lease strategy and best practice, but the question remains- is there a financial return on investment? JLL enlisted Radhika Handa to help expand existing quantitative research from leaders in the space by assessing what the costs and benefits to addition of green lease clauses to lease agreements are for owners and occupiers.
Solutions
- Assessed and updated old methodologies to determine the potential cost savings and GHG emissions reductions associated with various green lease clauses that are easily implementable by owners and occupiers alike on office and industrial properties.
- Analyzed the impacts of penalties on property owners for failure to comply with GHG emission regulations and standards. Additionally, Radhika reviewed the potential effects to an owner's NOI and asking rent prices.
- Explored the impacts of green leasing clauses on improved social aspects such as employee health, productivity, and potential for community economic development.
Potential Impact
Green leasing does have the ability to generate savings and emissions reductions. For a 100,000 square foot building, energy savings could reach nearly 28% for office properties (which is equivalent to taking 25 gas cars off the road per year) or 37% for industrial properties (which is equivalent to taking 18 gas cars off the road per year). As a result, tenants and asset owners who own portfolios of multiple properties can implement green leasing clauses in their lease negotiations to easily decarbonize their holdings, ensure cost savings, and improve the overall energy efficiency of buildings.