Prominent Retailers are Beginning to Adopt Green Leasing
By Adam Siegel, VP sustainability and retail operations, Retail Industry Leaders Association [email protected]
The Retail Industry Leaders Association (RILA), together with other retail associations, has organized a group of retailers and landlords to improve the environmental performance of leased retail space. That work resulted in the development and recent launch of RILA’s Retail Green Lease Primer, created in partnership with the Institute for Market Transformation.
Through best practice sharing, collaboration, and tool development, the concept of “green leasing” is steadily gaining recognition within a Working Group composed of both retailers and developers.
RILA recently surveyed the group to assess the progress that the industry is making toward leases that incentivize more efficient operations. The results show that significant progress has already been made in the last couple of years, and that retailers and landlords are steadily moving ahead with green leasing initiatives.
Existing leases pose a barrier to operating more efficient spaces
If a retail store is leased, the ability to make decisions concerning resource management is often dependent on collaboration between the tenant and landlord. For example, the tenant can usually make certain upgrades within its own space, but if the store isn’t submetered, it is difficult to measure the investment payback. Also, the tenant or landlord may not have the ability to pursue more sustainable strategies in areas that the other controls, such as the roof, waste hauling, and base energy systems. The question emerges: what can be done to overcome this barrier and achieve the cost savings associated with energy and waste reduction?
Green leasing is a process to identify lease provisions that can potentially be modified to address both landlords’ and tenants’ sustainability goals. These provisions tend to foster efficiency improvements that can save both parties money.
Potential “green” lease modifications fall into five broad types, and seek to:
- Improve the base building and common area – address improvements to the base building shell, including common areas.
- Improve interior tenant spaces – address improvements to the tenant’s space, consistent with the premises’ permitted use.
- Align economic incentives to encourage efficiency investments – address mis-alignments between the party that is investing in property improvements and the party that receives the benefits.
- Increase access to information on resource use – make the energy and water usage, and waste generation data visible to both parties.
- Clarify access and control of key areas of the property – define which party(ies) has access to spaces, such as the rooftop, and who has the right to implement projects in those spaces.
Retailers and developers can learn more about green leasing through RILA’s two-page Retail Green Lease Primer, which demystifies the concept of green leasing.
The industry is on the cusp of green lease adoption
Retailers and landlords involved in the Working Group have had access to the Primer for several months, and some retailers and landlords were exploring or implementing green leasing even before joining the Working Group. RILA’s survey revealed that green leasing is getting more attention than ever:
- 63% said that they have had a conversation with their real estate and leasing teams about green leasing. Educating and informing real estate and leasing professionals is the first step toward adoption of new green leasing provisions.
- 44% said they have developed sample green lease provisions internally. Once lease language tailored to the company’s needs is developed, it is reviewed by legal counsel and can be used to further educate the teams that negotiate leases.
- 19% said they have tested green lease provisions with at least one lease. Doing so builds further awareness in the industry, and helps companies to tweak the lease language to make it beneficial for both parties.
- 19% said they have developed a green lease.
Notably, over half of respondents viewed their internal construction & maintenance, facilities, and legal teams as being “willing” partners in internal green leasing conversations. That is a crucial step, since those are the key audiences for adoption of green provisions.
While green leasing adoption in the retail sector still lags behind that of the office sector, it is clear that green leases are becoming an established strategy for enabling more environmentally and financially efficient operations in all types of shopping centers.
To learn more, I recommend you join us at RILA’s upcoming Retail Sustainability Conference in Orlando, Fla., on Sept. 30 – Oct. 3. Now in its sixth year, the Retail Sustainability Conference is the best way for those in retail real estate, facilities, and sustainability roles to learn about how sustainability applies to them.
For more information, contact Adam Siegel, RILA’s VP sustainability & retail operations, at [email protected].
E-commerce platform provider strengthens sales team
MINNEAPOLIS, Minn. — Insite Software, a leading provider of B2B e-commerce platforms and shipping solutions, has appointed David Ricketts as its SVP of sales.
Ricketts has more than 15 years of experience in software sales management, working with retailers, wholesalers, manufactures, distributors and consumer packaged goods companies to expand sales revenues via B2B and B2C e-commerce, omnichannel commerce and mobile, social and tablet commerce.
Prior to joining Insite Software, Ricketts served as VP of sales, North America, for Hybris where he led a sales team credited with accounting for more than 60% of new customer revenue. Ricketts was also an executive with ATG (now Oracle), and served as director of national retail sales at Sterling Commerce, Inc. (now part of IBM), where he secured high-profile clients, including Staples, Walmart, Target, DSW, and Lowes.
"B2B e-commerce is a relatively untapped market poised to explode. Organizations will invest millions of dollars over the next three to five years in building out their B2B e-commerce capabilities," said Ricketts. "I am excited about Insite’s ability to grow its market share as a technology vendor of choice due to its native focus on the unique needs and requirements of the B2B e-commerce space, its market-leading integration capabilities, and exceptional time-to-value proposition."
"We continue to invest in new technology and key personnel to strengthen the Insite Software value proposition as an enterprise B2B eCommerce platform provider," said Steve Shaffer, CEO, Insite Software. "We are excited to have David on board to drive our sales strategy. His deep understanding of the B2B e-commerce space and proven track record of developing and leading highly motivated sales teams is a tremendous asset to Insite Software and our customers. Additionally, David’s customer-first approach aligns with our overall goal of driving value for our customers through strategic partnerships."
Crate and Barrel implements Kewill shipping solutions
Northbrook, Ill. – Crate and Barrel is implementing the Flagship parcel shipping and Netship expense management solutions from Kewill, Inc. Using the new Kewill software, Crate and Barrel hopes to consistently manage domestic and international shipments from multiple shipping locations across North America, integrating with a roster of carriers to ensure the best available rate and service is selected.
Currently, Crate and Barrel dispatches several million parcels each year, with future volume growth expected. Steve Pater, director of transportation for Crate and Barrel, said supply chain efficiency is a key focus of the retailer’s global expansion plans.
“With the Kewill Flagship and Netship software, we are confident we have found a proven solution that is scalable and flexible, enabling us to grow our business with the confidence that our costs are minimized and our shipping processes are consistently followed,” said Patel.