Building owners across the country are increasingly subject to state and local regulations that require them to improve the sustainability of their properties or face sometimes hefty fines. But when it comes to paying for those improvements, especially in offices with elevated vacancy rates stemming from reduced tenant usage, the question of who pays what can get sticky.
After all, tenants are the ones who control energy usage and are likely to reap the savings from green upgrades, at least under a common triple-net lease structure. But it’s landlords that front the cost of the improvements.