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This study aims to examine the trends in space per office worker and the influence of a number of factors on the ability to reduce space per worker. These trends are important in that they impact future office demand along with property values.

Using both survey and empirical data a simulation model is used to examine the impact on space per worker over the course of a typical lease. Factors considered include the length of lease, the worker growth rate of the firm, turnover and time to fill positions, the type of organizational management hierarchy, whether dedicated or non-dedicated space is utilized and firm policies toward working out of the traditional office.

Space per worker will continue to decline over time, yet collaborative work environments and the effects of traditional management and cultural momentum suggest that downsizing will take time. Counter to the initial hypothesis, growing tenants do not over-consume space in the early years but rather tend to renegotiate leases when growth spurs the need for more space.

It appears that modest economic growth is sufficient to offset downsizing trends, but some markets will be more affected than others. Portfolios dominated by larger than average tenants or U.S. Federal Government tenants will be affected much sooner by downsizing efforts compared to smaller private sector tenants. The mix of occupant types and age also matters, and this study does not delve into significant occupant-type differences by market. This study also does not directly consider design influences on productivity other than those mentioned through surveys: natural light, air quality, temperature control, noise and the presence of collaborative space.

Forecasters of office space demand must input an estimate of the growth in professional employment and then apply a space per worker assumption. This assumption in most markets will be declining, by as much as 30 per cent over several years. Washington DC is already being affected by downsizing, yet most markets with reasonably good economic growth will be able to offset most of this transition to more intensively used space.

Much of the existing stock needs to be rebuilt. Much of how the authors work and where is changing. This requires new perspectives on how productivity is measured and how remote workers are measured.

This is the first paper to try and reconcile the views of commercial real estate owners and operators with those of corporate space planners, both of who have opposite sides of the same lease. It is also the first to point out the explicit reasons why downsizing efforts are sometimes not as effective as expected.

This paper aims to contribute to the theory, practice and development trends in relation to commercial property leases.

The paper utilises three key methodological approaches to the research, namely, case studies, desktop literature review and questionnaire survey analysis. This approach enables the in‐depth analysis of both primary and secondary data in relation to the wider commercial property leasing market.

The main findings from an analysis of the case study cities demonstrate clearly that office tenants are requiring shorter lease terms, more tenant break options and rent reviews to market value.

The paper relates to the development of commercial property leases. While the research inferences are drawn from four major cities they would nonetheless represent a similar pattern from across the UK.

The findings of this paper should be of practical benefit to those involved in the drafting of commercial leases and in particular the management and leasing of commercial property.

This paper presents the results of original empirical research utilising data drawn from several authoritative sources. The value of the work lies in the lease patterns that have been discovered through the case studies analysis.

Using a unique data set, the purpose of this paper is to test the hypothesis that tenants pay increased accommodation costs for space in energy efficient office property.

The authors obtain lease contracts for office space in central Sydney, Australia. Empirical data on annual gross face rent and contract terms from each lease are combined with building characteristics and measured energy performance at the time of lease. Hedonic regression isolates the effect of energy performance on gross face rent.

No significant price differentials emerged as a function of energy performance, leading to a conclusion that tenants are not willing to pay for energy efficiency. Six factors – tenancy floor level, submarket location, proximity to transit, market fixed effects, building quality specification and, surprisingly, outgoings liability – consistently explain over 85 per cent of gross face rent prices in Sydney.

Rent premiums from an asset owner's perspective could emerge as a result of occupancy premiums, market timing or agent bias combined with statistically insignificant rental price differentials.

Tenants are likely indifferent to energy costs because the paper demonstrates that energy efficiency lacks financial salience and legal obligation in Sydney. This means that split incentives between owner and tenant are not a substantial barrier to energy efficiency investment in this market.

This study is the first to thoroughly examine energy efficiency rent price premiums at the tenancy scale in response to disclosure of measured performance. It also presents evidence against the common assumption that rent premiums at the asset scale reflect tenant willingness to pay for energy efficiency.

With the impending development of green buildings in Kuala Lumpur, the capital city of Malaysia, managing the criteria within the requirements of the rating tool’s certification shall be the responsibility of the respective parties when these buildings are in operations. In tenanted buildings, a lease agreement spells out the responsibilities of the owner/landlord and the tenants. The paper aims to discuss these issues.

The main aim of this study is to gauge the implementation of green lease among office buildings in Kuala Lumpur. This is made through an initial review of the adoption of green building criteria as well as the determination of the drivers and barriers perceived by office building managers in implementing green lease.

A survey amongst the managers of top grade office buildings in Kuala Lumpur revealed that the majority practiced some of the green criteria outlined in the Green Building Index. It also revealed that the most significant green lease terms commonly acknowledged by the respondents were energy and water-saving consumption as well as recycled material usage.

Through the identification of the barriers to implement green lease, the most significant barriers identified were related to cost and financing. Having identified these obstacles, appropriate action can be taken to bring forward green lease awareness amongst the various stakeholders in the office building sector in ensuring the successful operation of green buildings.

This paper models the lessee's default options and estimates the economic value of the options for a lessee using a discrete time binomial American option pricing model. Results show a positive relationship of the option premium with the original rent and a negative relationship with the relocation costs. Finds that the default probability is higher for lessees who are more sensitive to rental changes and place less emphasis on the fitting‐out quality. Suggests that rental volatility and rental growth rate are two significant factors that have positive relationships with the default option values. The risk‐free rate, on the other hand, has an inverse relationship with the default option values because a higher risk‐free interest rate reduces the present value of rental savings. Lease term length to expiration has a positive effect on the default option value, implying that the default option premium will decay as the term to expiry is shortened.

The purpose of this paper is to analyse the changing nature of commercial leases with specific reference to the landlord and tenant relationship, lease lengths and incentivisation in the post-recessionary UK property market.

The research applies data analysis utilising the Estates Gazette Interactive database coupled with survey analysis conducted across three UK cities to investigate and compare the changing nature of the commercial property leasing market and the landlord and tenant relationship.

The empirical analysis highlights that recessionary conditions prevalent in the market from the 2007 global crisis has caused a reassessment of lease structures, leading to shorter lease terms and increased use of incentives, as tenants have been empowered to negotiate more flexible leases due to their stronger market position.

This paper builds upon previous research conducted back in 2005, investigating commercial leases in the market up-cycle. The recent volatility in the commercial property sector requires fresh insights and in-depth analysis of lease patterns, length and covenant strength, which is fundamental for investor decision-making. In addition, past research has tended to consider solely landlord or occupier perspectives, whereas this research offers new insight into the landlord–tenant lease negotiation process.

This paper aims to investigate the drivers and barriers for green leases and tenancies in sustainable “Building Research Establishment Environmental Assessment Method” (BREEAM) and “Leadership in Energy and Environmental Design” (LEED) certified office and office buildings in Norway, the UK and the USA. This study focuses on the differing perspectives between owners and tenants. It is then considered as to how these issues are dealt with during different phases of a buildings life cycle. This research is based on existing literature and semi-structured interviews that studied qualitative and quantitative elements in the context of ownership and tenancy of single and multi-tenanted sustainable office buildings.

Using a mixed-method approach involving semi-structured interviews with both qualitative and quantitative elements along with desk research, this paper evaluates how green leases and tenancies in offices and office buildings that are BREEAM and LEED certified require a reconsideration and re-evaluation of the acquisition, operation and disposal of office buildings by building owners and their tenants. These stakeholder relationships are supported theoretically using a theoretical model that outlines the interrelation between the sustainable building and the relationships of the building owner, the user and the FM service provider.

The data gathered from the interviews justify and partly contradict some of the statements within existing literature, diminishing the importance of cost and the barrier of split incentive but instead illuminate the importance of less tangible considerations such as company policy or a sustainability strategy. The results also note the realisation of a changing market for commercial real estate driven by the sustainable business needs of tenants for the occupation of workspaces.

These findings have the potential to further develop theories and provide an insight into how the relationships between actors from a business, procurement and contractual perspective need to be developed to ensure more proactive development of green leasing of new and existing sustainable office buildings, along with where strategic attention is required during the building design, construction, operational and use phases.

This paper is based on original research through interviews and literature studies supported by an existing theoretical model. The results have been partly presented and initially discussed at the WBC World Congress 2016 in Tampere, Finland.

This paper aims to identify the state of the art in Green Leases and Green Leasing in theory and practice, while also identifying how the roles and motivations of the stakeholders of “owner/landlord”, “lessee” and “facilities management” are different in a building that uses Green Leasing and Green Leases, as opposed to the one without.

Through existing literature and existing case studies from 1995 to the present day, this paper will identify the state of the art of Green Leases and Green Leasing and the extent to which literature-based discussions have played out in their practical application in the real estate sector. The roles of key stakeholders will be analysed and then compared to the interactions and roles identified in a theoretical model that describes the same stakeholders but from a more traditional stakeholder perspective. This will be achieved through using literature from journal papers mostly from the disciplines of built environment, facilities management, finance, investment, law, management and real estate.

The literature and case studies found in literature demonstrate a gradual move towards advancing Green Lease adoption and development. While the roles of key stakeholders do see a change in Green Leased buildings in terms of, for example, changing competencies for facilities managers (FMs) and more user engagement with their buildings sustainability, the literature indicated most of the changes are realised through a strengthening of existing interactions already evident in buildings without a Green Lease or Green Leasing.

This paper provides a state of the art review on the development of Green Leasing and Green Leases in theory and practice from a stakeholder perspective. It provides possibility to expand further on the changing roles of these stakeholders in Green buildings, which in turn could also positively affect the further development of Green Leases themselves, as well as sustainable certification methodologies such as Europe’s leading certification “Building Research Establishment Environmental Assessment Method” (BREEAM).

The purpose of this paper is to illustrate, by reference to practical examples, how leases of commercial buildings can be more responsive to environmental issues.

The paper explains how difficult it is within the structure and content of conventional leases to reduce the environmental impact of the tenanted commercial built environment. It explores the interplay between the content and structure of commercial leases and the behaviour of building owners, managers, tenants and occupants, illustrated through the experiences of a large Australian‐based commercial office building owner/operator.

With reference to practical examples it shows how conventional leases stifle innovation and illustrates the difficulties in drafting leases that enable a responsive approach to building management to be adopted. It shows how more fundamental changes that align and reward owners and tenants for working together for mutual benefit are required.

The paper presents a number of “model clauses” for encouraging best environmental practices and concludes with a suite of recommendations.

Although there have been conversations about green leases in recent years, there is little detailed evidence of their use in the marketplace. This paper remedies that deficiency by taking a case study approach that: illustrates the opportunities and difficulties in negotiating green leases; and shows how attempts to provide innovative building management can be hindered or supported by lease terms.

Reviews recent New Zealand legal cases involving CBD office building leasing incentives, the efficacy of confidentiality agreements and current practical valuation problems arising when analysing office rentals. Takes a controversial stand in postulating that customary methods of decapitalizing incentives in use by the valuation profession lead to errors in calculating effective rentals. Suggests a new break‐even method to analyse lease incentives. Presents a “user‐friendly” step‐by‐step spread‐sheet goal‐seeking model to undertake the complex calculations required. The model shows graphically the explicit rental forecasts required and the resulting effective analysis alongside the results of applying customary methods. Aims to bring some balance to this area of current valuation controversy and to provide a powerful new tool to analyse accurately incentive‐induced office, retail or industrial rentals.