Should Real Estate Deals Include Operating Costs?
That’s a question posed by Stephen Miller, an associate professor at the University of Idaho College of Law in the Idaho Statesman.
Common commercial leases require the lessee to bear the cost of operations, he wrote, but this strategy also gives the landlord zero incentive to make improvements to building efficiency, primarily because any cost would be incurred by the landlord and the benefit would be to the tenant.
But what if tenants and landlords could somehow share upfront costs and share returns?
That may now make sense as an increasing number of cities and states are mandating that owners of large commercial buildings either disclose energy use on a yearly basis or at the time of sale. The benchmarking rule is taking root in California and in cities like Seattle.
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