2024-23106. Notice of Inquiry Regarding Sustainable Leasing

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General Services Administration

1. [Notice-PBS-2024-10; Docket No. 2024-0002; Sequence No. 43]

AGENCY:

Public Buildings Service (PBS), Office of Leasing, General Services Administration, (GSA).

ACTION:

Notice; Request for Information (RFI).

SUMMARY:

GSA is exploring solutions toward achieving higher sustainability standards in federally leased locations. GSA is publishing this notice to request comments to help us understand the overall impacts of advanced sustainability requirements related to executing green leases. At this time, GSA has not determined whether or not it will work towards a notice of proposed rulemaking to address this topic.

DATES:

Interested parties should submit written comments to the Regulatory Secretariat as noted below on or before December 6, 2024.

ADDRESSES:

Submit comments in response to this inquiry to: https://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for “Notice of Inquiry Regarding Sustainable Leasing”. Follow the instructions provided at the “Comment Now” screen. Please include your name, company name (if any), and “Notice of Inquiry Regarding Sustainable Leasing” on your attached document.

Instructions: Comments received generally will be posted without change to https://www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two-to-three days after submission to verify posting.

FOR FURTHER INFORMATION CONTACT:

For clarification of content, contact Ms. Elizabeth Brown, Realty Specialist at [e-mail] or 202-355-3822. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at [e-mail] or 202-501-4755. Please cite “GSA Sustainable Leasing Inquiry”.

SUPPLEMENTARY INFORMATION:

I. Background

GSA has incorporated green requirements into its Request for Lease Proposal (RLP) and Lease documents for ( print page 81086) the past 25 years. These green requirements are driven by statutes, federal policies, Executive Orders, and various industry standards. They include provisions related to Energy Star, third-party green ratings, HVAC and commissioning, indoor air quality, water conservation, sustainable products, and landlord reporting of energy and water consumption.

In December 2021, President Biden issued Executive Order 14057 on Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability ( https://www.whitehouse.gov/​briefing-room/​presidential-actions/​2021/​12/​08/​executive-order-on-catalyzing-clean-energy-industries-and-jobs-through-federal-sustainability/​) which was accompanied by OMB Memorandum (M-22-06 ( https://www.whitehouse.gov/​wp-content/​uploads/​2021/​12/​M-22-06.pdf). This Executive Order set new climate and sustainability goals for the Federal government, with the target of a net-zero emissions building portfolio by 2045.

Per the OMB memorandum (M-22-06), “ . . . all new (including new-replacing, succeeding, and superseding) leases entered into after September 30, 2023, for at least 25,000 rentable square feet in a building where the Federal Government leases at least 75 percent of the total building square footage are green leases. Such green leases must require the lessor to report to the agency annual data on facility greenhouse gas emissions, energy consumption, water consumption, and waste generation . . .” (Section I.F.2). The Implementing Instructions for E.O. 14057 ( https://www.sustainability.gov/​pdfs/​EO_​14057_​Implementing_​Instructions.pdf) further clarify that these requirements will be measured for “ [all] new lease solicitations issued after September 30, 2023, for at least 25,000 rentable square feet (RSF) where the Federal Government occupies at least 75 percent of a building are to be green leases.” (Section 4.4.13).

The E.O. 14057 Implementing Instructions further require the following:

“ GSA must issue green lease standards and guidelines to be applied to Federal leases, including provisions that promote a standard framework for lessor reporting of emissions, energy, water, and waste associated with leased space. Agencies with independent leasing authority must incorporate the guidelines and language into agency-specific leasing policies and procedures. ”

GSA issued the Green Lease Standards and Guidelines, ( https://www.gsa.gov/​system/​files/​GLSG%20Final%20-%209_​28_​23%20C%20V2.pdf) Version 1.0 on September 29, 2023. These standards reflect a core set of green requirements that are included in federal leases.

II. Purpose

This inquiry is an important step towards exploring implementation instructions on how to successfully advance green leasing requirements into leasing solutions.

GSA is considering adding more advanced green leasing requirements to lease solicitations. These requirements would apply to leases that are 25,000 rentable square feet or greater where the government collectively occupies at least 75 percent of the building. GSA has identified several optional requirements from GLSG Version 1.0 to include as required in a Version 2.0 update. This RFI seeks to understand how the commercial real estate market will meet these advanced sustainability requirements and any potential impact they will have on rental rates.

The key sustainability solutions that are being explored include: electrification of equipment upon replacement or end-of-life, the use of energy efficient equipment, periodic recommissioning, and landlord tracking and reporting of operational energy usage and waste management.

II.A. Electrification of Building Systems

GSA is reviewing energy efficiency as it relates to the electrification of major base building systems, meaning less reliance on fossil fuels for leases that are 25,000 rentable square feet or greater, where the federal government collectively occupies at least 75 percent of a building. GSA is considering requiring that upon replacement or end-of-life, building equipment used for heating, cooling, ventilation, and domestic hot water be changed from equipment relying on fossil fuels to equipment using electricity as the power source.

II.B. Use of Energy Efficient Equipment

For leases that are 25,000 rentable square feet or greater, where the federal government collectively occupies at least 75 percent of a building, GSA is considering requiring that energy-efficient equipment or components that follow the minimum performance requirements of Energy Star labeled or Federal Energy Management Program (FEMP)-designated program standards be installed for major base building systems (heating, cooling, ventilation, process loads, and domestic hot water) upon the end-of-life or replacement of current equipment.

II.C. Periodic Recommissioning

For leases that are 25,000 rentable square feet or greater and where the federal government collectively occupies at least 75 percent of a building, GSA is considering requiring a building owner to periodically recommission the major systems related to HVAC, controls, lighting, and domestic hot water based on relevant industry standards, to optimize systems and to maintain and enhance energy efficiency.

II.D. Reporting of Waste Generation

For leases that are 25,000 rentable square feet or greater and where the federal government collectively occupies at least 75 percent of a building, GSA is considering requiring the building owner to track and report waste generation, including municipal solid waste (trash and recycling), and construction and demolition debris.

II.E. Lessor Tracking/Reporting of the Government Tenants' Energy Use

For leases that are 25,000 rentable square feet or greater, and where the federal government collectively occupies at least 75 percent of a building, GSA is considering requiring the building owner to track and report energy use for federal government tenants independent from non-government tenants. This could include estimating the government's annual energy use if tenant level submeters are not available.

III. Request for Operational and Economic Information

GSA seeks responses to the questions listed below. Please explain the reasoning behind your responses in detail. Also, please provide any data, studies, or other evidence that supports your response.

In your response please include your contact information, your business socio-economic category if applicable, and a brief description of your business.

GSA also seeks to better understand what industry changes are feasible from an economic perspective. GSA seeks economic data and consumer research to help increase its understanding of the impact that added sustainability requirements will have on rental rates for government leases in multiple markets. In your response please consider some of the questions below.

To help GSA review comments efficiently, identify the question to which you are responding by its associated number and letter ( e.g., “IV.2.a”) or whether you are commenting on a topic not listed below. ( print page 81087)

IV. Questions for Industry

(1.) What measures would be required to transition to electric, non-fossil fuel using equipment for major building systems (heating, cooling, ventilation, and domestic hot water), upon the equipment's replacement or end-of-life?

(a.) What are the constraints or obstacles associated with this transition?

(b.) Please provide an estimate of the impact, if any, that electrification of building equipment would have on rental rates for government leases. Please identify the estimated costs and savings associated with implementing electrification.

(2.) What are the steps needed to shift toward using energy efficient equipment for building systems that follow the minimum performance requirements of Energy Star or FEMP-designated program standards (upon replacement or end-of-life)?

(a.) Are there challenges with obtaining energy efficient equipment and components for major building systems, or following the minimum performance requirements of Energy Star or FEMP-designated program standards for a federal leased space? If yes, what are those market challenges?

(b.) What impact on rental rates, if any, would installing energy efficient equipment and components for major building systems, or following the minimum performance requirements of Energy Star or FEMP-designated program standards?

(3.) If periodic recommissioning is required, what is the appropriate frequency that major building systems should be recommissioned?

(a.) Are there commercial industry standards for building recommissioning that we should consider using?

(b.) What parameters should we consider using if we chose to include recommissioning requirements (eg: percentage of government occupancy; size of lease; term of lease)?

(c.) What impact would periodic recommissioning requirements have on rental rates?

(4.) Are building owners currently required to track and report waste generation (related to trash, recyclables, and construction & demolition debris) in your local jurisdictions (city, county, etc.)?

(a.) What, if any, impact would this type of waste tracking and reporting have on the proposed rental rates for federal government leases?

(5.) Given the thresholds of 25,000 rentable square feet or greater and at least 75 percent federal government occupancy, would any of the 5 key sustainability solutions reflected in Section II of this RFI prevent building owners from offering space to the government on a competitive lease procurement?

(6.) Are all or any of the 5 key sustainability solutions reflected in Section II of this RFI currently required by any building owners in jurisdictions or markets that you are familiar with (city, county, etc)?

(a.) If so, which solutions, and which markets?

(b.) Have building owners been able to meet the requirements like these in markets you are familiar with, and what impact, if any, have they had on rental rates?

(7.) Please identify additional advanced sustainability requirements that GSA should consider in the pursuit of a more sustainable leased inventory.

(a.) What are they?

(b.) What are the expected impacts on rental rates for government leases associated with your recommendations?

Crofton Whitfield,

Assistant Commissioner, Office of Leasing, Public Buildings Service, General Services Administration.