BARRIERS AND BREAKTHROUGHS FOR MULTI-TENANT DEVELOPMENTS

The report identifies the 'split' between construction, operational, and management costs as the primary hurdle to greening multi-tenant buildings. It argues that integrated design can achieve high performance without increasing capital costs, ultimately benefiting owners through higher net operating income and tenants through lower total occupancy costs. Proposed solutions include 'green leases' with cost pass-through clauses, sub-metering, and the use of Energy Service Companies (ESCos) to finance retrofits.

• The primary obstacle to high-performance multi-tenant buildings is the misalignment of financial responsibilities, where developers pay for construction, tenants pay for operations, and landlords handle management.
• Integrated design processes can enable high-performance or LEED-rated buildings to be constructed without increasing initial capital costs, potentially even resulting in capital savings.
• High-performance buildings provide measurable economic advantages, including higher occupancy rates (approximately 1.8% higher for Energy Star labeled buildings) and increased worker productivity ranging from 5% to 16%.
• Current leasing structures, whether net or gross, often fail to incentivize efficiency because they lack mechanisms to share the financial benefits of energy and water savings between the owner and the tenant.
• The report suggests several structural solutions to accelerate adoption, such as 'tenant to tenant cost pass-through' clauses to distribute amortization costs of upgrades across multiple tenancies and the use of ESCO financing to bridge short-term lease gaps.
• Buildings in the U.S. are significant contributors to climate change, accounting for over 38% of total CO2 emissions and 70% of the nation's electricity use.

APA

Carmichael, C., Fluhrer, C., & Bonnett, E. (2008). BARRIERS AND BREAKTHROUGHS FOR MULTI-TENANT DEVELOPMENTS. RMI. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_Barriers_and_Breakthroughs_for_Multi-Tenant_Developments.pdf

Chicago

Carmichael, Cara, Caroline Fluhrer, and Erik Bonnett. BARRIERS AND BREAKTHROUGHS FOR MULTI-TENANT DEVELOPMENTS. RMI, 2008. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_Barriers_and_Breakthroughs_for_Multi-Tenant_Developments.pdf.

Wikipedia

{{cite report |last1=Carmichael |first1=Cara |last2=Fluhrer |first2=Caroline |last3=Bonnett |first3=Erik |title=BARRIERS AND BREAKTHROUGHS FOR MULTI-TENANT DEVELOPMENTS |publisher=RMI |date=3 March 2008 |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_Barriers_and_Breakthroughs_for_Multi-Tenant_Developments.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carmichael2008barriers, author = {Carmichael, Cara and Fluhrer, Caroline and Bonnett, Erik}, title = {{BARRIERS AND BREAKTHROUGHS FOR MULTI-TENANT DEVELOPMENTS}}, institution = {RMI}, year = {2008}, month = mar, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_Barriers_and_Breakthroughs_for_Multi-Tenant_Developments.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }