Posts Tagged ‘Gross lease’

Physicians Welcoming Green Leases

Tuesday, August 18th, 2009

As Green Buildings and LEED have become more popular and mainstream,  medical office tenants and landlords need to realize that a green lease is an excellent vehicle to express their commitment to the environment.  Both benefit by having a green-operated building and reduced operating costs.

feature_greenlease3For physician tenants, going green is a way to future-proof the lease and stay competitive because of new building technologies that are advantageous to their operations and profitability.  For landlords, studies show that added benefits are substantially increased asset value, higher rents and occupancy rates.

A gross lease arrangement is preferable to a net lease, because it incorporates mutually-beneficial clauses such as the ability to pass-through costs for capital improvements that reduce operating costs on an amortized basis as part of operating expenses.  A 2008 study by CoStar reported that green buildings outperform conventional buildings in terms of occupancy, sale price and rental rates – sometimes by significant margins.  The CoStar study also found that LEED buildings command rent premiums of $11.33 PSF more and 4.1 percent higher occupancy than conventional buildings.