We have a question about retail tenant spaces inside an office building. The owner will provide the retail spaces as cold shells for the retail tenants to fit out after the building is complete.
The LEED project boundary includes the entire building including all the retail tenant spaces. Therefore, we are expected to submit lease agreements with binding language that requires tenants to comply with ASHRAE Standard 62.1.
Some of the retail spaces are still not leased so there is no lease agreement yet and it is uncertain they will be leased before we submit for certification.
1. In this case, may we change the project boundary to exclude the tenant spaces for which there is no lease?
2. If changing the project boundary is not possible, what else can we do to deal with this situation?
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Jens Apel
134 thumbs up
June 29, 2016 - 7:11 am
I do not think you could change the boundary as it will then not be the building in its entirety.
What we did successfully in such a situation is having a documention by the owner / landlord stating that a certain set of paragraphs / requirements are a standard part of binding lease agreements and including these paragraphs in the documentation.
Michelle Rosenberger
PartnerArchEcology
522 thumbs up
June 29, 2016 - 11:38 am
Hi John,
Jens is right. You cannot exclude the space. We go through this a lot with C&S projects with no identified tenants. The reviewers have been very focused on this lease issue of late. The guidance we have received is as follows:
"A binding Lease or Sales Agreement is used if a Core & Shell project is claiming performance improvements or prerequisite/credit compliance based on future tenant work. This is described in Appendix 4 of the BD+C Reference Guide. Appendix 4 indicates that the Agreement must be signed by both the developer and tenant, however, if the tenant is unknown at the time the project is completed, ensure that the owner/developer signature is included with/on the Agreement."
They want to see an actual lease document but you don't have to show the whole proprietary document, nor do you have to have a tenant signature. However, you do need a signatory page with the Owner signature, an exhibit with the measures like ventilation, minimum energy and whatever else you are taking credit for spelled out in detail, and the part of the lease that shows this particular exhibit is an integral part of the document.
Charalampos Giannikopoulos
Senior Sustainability ConsultantDCarbon
84 thumbs up
June 30, 2016 - 10:39 am
So far we have managed to overcome this issue when the tenant is yet unknown by providing a sample of the lease agreement describing all relevant conditions AND a confirmation signed by the owner that the sample of lease agreement will be part of the future tenant agreement and that this will be enforced.
John Mader
July 4, 2016 - 3:24 am
Thank you for your replies, Jens, Michelle, and Charalampos.
I think our team probably not be able to obtain the sample lease agreement and the owners confirmation. In that case, do you think it is acceptable to submit the plans and equipment lists that are prepared by the tenant designers? ( The tenants have been almost decided now.)
Michelle Rosenberger
PartnerArchEcology
522 thumbs up
July 4, 2016 - 4:05 pm
Hi John,
I think you are in a very tough spot. A Core & Shell project only has two ways to achieve a prerequisite/credit. You either include it in your scope of work or you include it by lease agreement. If this were not a Prereq issue, I would say that you are simply going to lose the credit since you can't get it into a lease. However, ventilation is a Prereq so that is not an option.
If you submit the tenant info, you are basically saying the tenant ventilation is part of your scope, and you have control over it and can make it comply with LEED requirements. If that is what you are saying, that you would do ventilation rate procedures on their equipment for compliance and make them change it as necessary, maybe. But even then it might beg the question why you are not an NC that is in control of all the tenant scope.
I'm surprised you could make certification without any tenant requirements. Ventilation is not the only thing that is usually placed on the tenant in a cold, dark shell. At the very least minimum energy also usually has some assumptions in the energy model that the tenant needs to comply with. How were you planning to handle these? Is it possible to pursue LEED NC instead?
John Mader
July 4, 2016 - 10:50 pm
Hi Michelle,
Thanks for your comment. I understand your opinion that we probably should our project as NC project.
Because the building standards in Japan are rether strict buildings tend to meet the LEED requirements without tenant requirement, but we should look over the detaild from now.
John Mader
July 4, 2016 - 10:55 pm
I have one thing about this issue. The question is, is it acceptable to submit a design for a tenant that is planned by the designer whose design is not awarded by the owner?
I assume our building will meet the ASHRAE requirement at the time of the new building's construction completion. I think the CS has an aspect that the review is held with a design that shows the situation in certain period ( mostly the condition of building construction completion) not all the situations during the building's life span.