Summer 2010
Green Buildings; Green Stores By Elizabeth Angyal

Green Your Store Now

Sometimes the simplest ideas for conservation can be the most powerful. Here are some green ideas you can implement in your store right away and with minimal expense:

  • Recycle the packing materials that you receive.
  • Use minimal packaging at your point of sale or use packaging made of recycled materials.
  • Give your customers the choice of a reusable bag (charge only to cover your costs) that has your business name or logo.
  • Replace your light bulbs with more energy-efficient bulbs, such as LED's.
  • Shut down electronic equipment when not in use.
  • Install automatic lighting controls (on/off) to minimize energy use in areas such as storage rooms or restrooms.
  • Use programmable thermostats.
  • Use energy efficient products and equipment whenever possible (see energystar.gov).

As laws requiring green building codes get on board, here’s a primer on what to look for in your leasing agreement and where.

City ordinances and landlords are mandating green building materials and operational materials with increasing frequency. If you rent retail space or are planning to lease a new one, you’ll probably need to conform to new green requirements.

Many of the green requirements that landlords include in their retail tenant leases are borrowed from the LEED (Leadership in Energy and Environmental Design) rating system, which is a nationally recognized third-party green building certification program. Until the last few years, LEED certification was achieved largely by single-purpose buildings such as libraries or office buildings. In response to increased demand by developers, tenants and various consultants such as architects and engineers, the USGBC (United States Green Building Council) has produced a more diverse group of certifications. One example of this is “LEED for Commercial Interiors.” This certification can be obtained by tenants who lease space (but don’t own or control the building) in a shopping center or office building. It deals primarily with interior build-outs, such as walls, lighting, painting, carpeting/flooring.

Many cities are starting to include green building requirements in their municipal codes and are starting to offer incentives such as reduced permitting fees or shorter processing times for projects that achieve at least a base LEED certification. For those new to LEED, the LEED system has four increasingly more demanding levels of certification: LEED Certified (base), Silver, Gold and Platinum (the highest rating). The more green building “points” you achieve, the higher the potential rating. It is likely that in the future, LEED or other types of green requirements will increasingly become the norm, as communities raise their expectations and standards regarding what constitutes a sustainable development or business.

Green building requirements

Some common lease green building requirements that tenants might be obligated to meet are:

  • The use of water conserving fixtures (for example, low-flow toilets).
  • High efficiency HVAC equipment (in retail centers installation of the HVAC equipment is often the responsibility of the tenant).
  • Energy efficient lighting (including the ability to control lighting levels to minimize electrical usage, and the increased use of daylight).
  • High “R” value (resistance to heat loss) insulation materials (walls and ceilings), which results in increased energy use efficiency.
  • Low “U” value (thermal transmission) rated windows/storefronts.
  • Energy use monitoring (to verify performance).
  • Use of sustainable finishes, such as renewable floor materials (example: bamboo floor boards or linoleum) and low-VOC (“volatile organic compounds”) finishes. Low-VOC paints, which are now available in many colors, perform very well.
  • Storage and collection of recyclables.

Read the fine print

Make sure to read all landlord and municipal requirements carefully and understand the capital and operating cost implications, as well as the corresponding impact to the “look and feel” of your space. Look for these requirements in different documents that you sign:

  • The main lease document.
  • CC & R’s (Conditions, Covenants and Restrictions) that are private operating covenants mandated for all tenants. These are common if you’re part of a shopping center, and can cover items such as advertising displays on the sidewalks, outside seating and rules for trash disposal and collection. They have a similar purpose as private covenants you may have in your residential subdivision.
  • Landlord’s “Design Guidelines.” This document sets design standards for the shopping center and could include at least some green building elements. Signage colors and styles, awnings, and storefront design requirements might be addressed in this document.
  • The Tenant’s Work Letter (space build-out requirements that the tenant is obligated to perform). Examples of items typically covered in this document are HVAC units/systems (heating, ventilation and air conditioning), insulation and storefronts (example: type of storefront glass that is required to be installed).

Worth the investment?

While improvements such as energy-efficient lighting and HVAC may require a larger capital investment, many retail tenants pay their own utility charges and will realize significant savings over the term of their lease. You can reduce any “green premiums” (the difference in cost between a green/sustainable material and traditional materials) by seeking out sustainable substitutes early in the design phase of your space.

Selecting an architect or space planner who has experience in designing sustainable retail spaces, as well as experience working with your municipality, is advisable. An experienced professional should also be knowledgeable about potential green building rebates, tax credits or other cost savings that may be available from your state, county, city or various local utility companies. Dsireusa.org is a comprehensive online database of state, local, utility and federal incentives that are available as a result of public policy efforts to promote energy efficiency.

A green indoor environment is becoming increasingly valued by customers. It may not be the reason someone initially visits your store, but it might be the additional motivation they need to become a loyal, repeat customer. The use of sustainable materials also creates a real opportunity to educate your customers. Whatever green elements you choose to incorporate, make their presence known as part of what makes your products and/or services special. This can be accomplished through a comprehensive in-store signage program that points out your energy saving features and use of sustainable materials and practices. This is a feel-good service, appealing to both adults and children. At the same time it will promote your business as a responsible member of the community.

Elizabeth Angyal is a real estate development expert with more than 25 years of experience managing the real estate plans of high-growth, multi-unit national tenants. She has worked for Fortune 50 companies such as Pepsi and McDonald’s as well as retailers and service providers such as FedEx-Kinko’s and Pep Boys. For more information, visit angyalrealtyadvisors.com.

Elizabeth Angyal

Elizabeth Angyal is a real estate development expert with more than 25 years of experience managing the real estate plans of high growth, multi-unit national tenants. She has worked for Fortune 50 companies such as Pepsi and McDonald’s, as well as retailers and service providers such as FedEx-Kinko's and Pep Boys. Elizabeth offers seminars and individual consultations in site selection and lease negotiation. For more information, visit www.angyalrealtyadvisors.com.




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