Real Estate Forum - January 2008

ties in which we build and I think that it’s a real opportunity for us to make a positive impact,” he says. “We hope that our strategy is followed by others and it helps raise the bar so that our industry becomes more green and much more aware of environmental issues.”

Watters Creek at Montgomery Farm in Allen, TX will be the company’s first project seeking LEED certification. Slated to open in late spring, the 1.2-million-sf mixed-use development features 170,000 sf of boutique offices and 288 multifamily residences located above retail space. It is reportedly the first large mixed-use project in the state to seek LEED certification.

The project is one of seven that Trademark is registering for the designation. Among them is Padre Staples Mall, an existing million-sf asset in Corpus Christi, TX. Montesi notes that it is one of very few retail centers seeking LEED for Existing Buildings certification. While some reports on sustainable design have suggested that retrofitting can pose much more of a challenge than ground-up green building, Montesi has not found that to be the case with Padre Staples, an older building that affords “tremendous opportunities to save energy and use materials that are more environmentally friendly,” he says.

What may prove to be challenging as LEED certification evolves for the retail sector are the implications for landlord-

tenant relationships. How might LEED certification for shopping centers change new lease negotiations? If a landlord can provide tenants with substantial utility savings through green practices, couldn’t it then increase rents? Shouldn’t a tenant’s LEED designation factor into its lease?

With most of the USGBC’s retail-cen-tric programs scheduled to kick into full gear later this year, it is certainly too soon to answer these questions. But Regency’s Smith says his company is taking all of these matters into consideration as it looks

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to the future of its green practices. “We’re really unsure if we’ll ever be able to get any more rent from a tenant given what it will save on operating expenses. The logic is, it’ll save on operating costs and a tenant can therefore pay more in rent. But no one is fully in a green center yet, so they’re not realizing any savings at this point.” ◆

For more news on sustainability and green building, visit www.remedianetwork.com/green.

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