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Lease Structures & Occupancy Costs In Eco-Labeled Buildings, Jeremy Gabe, Spenser Robinson, Andrew Sanderford, Robert A. Simons
Lease Structures & Occupancy Costs In Eco-Labeled Buildings, Jeremy Gabe, Spenser Robinson, Andrew Sanderford, Robert A. Simons
School of Business: Faculty Scholarship
Purpose: This research investigates whether energy-efficient green buildings tend to provide net lease structures over gross lease ones. It then considers whether owners benefit by trading away operational savings in a net lease structure.
Design: Empirical models of office leasing transactions in Sydney, Australia, with wider transferability supported by analysis of office rent data in the United States.
Findings: Labelled green buildings are approximately four to five times more likely than non-labelled buildings to use a net lease structure. However, despite receiving operational savings, tenants in net leases pay higher total occupancy costs, benefiting owners. On average, …