Tenant Broker’s Playbook

Tenants have their own business to run, so they rely heavily on their broker to provide information and counsel about meeting their space requirements. As a tenant broker, you are uniquely positioned to help tenants understand the long-term implications of their leasing decisions, including how efficiency, health, and safety measures can affect everything from operating costs to worker productivity to ESG reporting. By staying current with related trends and local policies, you will guide your clients to the right choices, and gain or maintain their trust—and their referrals.

Take the Lead

• Understand the latest regulations. Ensure that you are up to speed on the latest rules and regulations about the City’s Building Energy Performance Standards (BEPS) and updated building codes, and how they might impact your clients’ site selection and lease negotiations. BEPS set minimum building performance standards for existing buildings. These standards are based on and measured against a building’s benchmarking. Buildings that are performing worse than the standard for their property type will be required to improve their performance.
• Become an expert in green leasing. Green leases—also called energy efficient leases, high performance leases, or landlord-tenant aligned leases—refers to language in a landlord-tenant lease agreement that helps to ensure sustainable and healthy workplaces through smart design, construction, and operational standards.

Ask the right questions before starting the letter of intent (LOI)

• Ask your client about their sustainability goals. Some clients will have strong sustainability goals for their business. Others will have specific requirements for their space, such as a desire to pursue LEED certification, that the base building be certified for health and wellness considerations, or that they want a space that allows them to comply with greenhouse gas (GHG) reporting requirements. Asking a client questions about their sustainability goals, both in their business and their operations, shows that you are thinking about adding value, by aligning their goals with the transaction.

Get building performance data during the site search

• Check the building’s energy performance. The City’s large building (≥50,000 sq. ft.) owners have been required to benchmark their building’s energy performance since 2017. That information is public, which means there’s an opportunity for you to look at the City’s Covered Buildings List to check out how a building is performing. This is important because it is an indicator as to how efficiently your candidate building’s systems are operated which can affect tenant thermal comfort and indoor environmental quality. If a building has a high ENERGY STAR score, it means it has been historically one that is well managed with lower operating expenses.
• Request the building’s scorecard. Ask the building owner to see the building’s energy benchmarking scorecard, an annual report produced for every commercial building that provides information about building performance and how it compares to other, similar properties in the City.
• Ask if the building is likely to be compliant with BEPS. The answer to the question might affect a tenant’s operational expenses.
• Ask if there are any building sustainability achievements the tenant should be aware of. Ask if there is anything the building has achieved from a sustainability perspective, such as awards, certifications, milestones, or progress towards goals, that the owner would like to share with a prospective tenant.

As you enter the LOI stage, during either a relocation or a renewal, be sure to follow up with additional questions.

Ask about the base building

• Current building performance

  • Is the building on track to meet the standard and be compliant with the first BEPS period? If not, what is the plan of action to bring it into compliance?

• Recent capital improvements

  • Have there been any recent infrastructure upgrades to major building systems, such as mechanical and lighting systems or the building envelope? Note that upgrading infrastructure-related equipment not only improves energy efficiency, but also improves tenant thermal comfort, indoor air quality, and noise associated with HVAC equipment.

• Renewable energy
• Does the building have on-site renewable energy or a green purchasing power agreement in place? Note that, due to available incentives in the City, a typical renewable energy system investment will have a short payback period.
• Plans for improvement

  • Has the building recently had an energy audit or undergone retro-commissioning? If so, ask to see the report. If not, ask if there’s a plan to do so. Note that energy audits investigate the current condition of a building and provide recommendations for energy improvements. Retro-commissioning investigates and fine-tunes existing equipment to optimize operations.
  • Does the owner have a strategic energy management plan to implement the recommendations from an energy audit? If so, what is the progress on implementation? If not, is there an intent to develop one?
  • Which performance improvements will affect the owner’s capital expenditures versus the tenant’s potential operational expenditures?