WALTHAM, MA-The tenant's tenet being energy conservation, National Grid's 270,000-sf lease at Reservoir Woods relied heavily on an adherence to sustainability, company officials tell GlobeSt.com in discussing the 20-year agreement. But while the energy delivery giant and what will be a local leader in green building technology would seem a natural fit, observers say National Grid's environmental mantra is not a singular occurrence.

"The tenants are absolutely demanding it," DTZ FHO Partners principal Brian Hines says of LEED-certified minimums. At a major real estate forum last week, Hines said LEED language is becoming standard in leasing RFP's. The transformation has been "astounding," Hines says in describing sustainability awareness among tenants as going "from zero to 60" in 2007.

The leasing of 77 CityPoint just up Route 128 from Reservoir Woods was aided greatly by the six-story, 200,000-sf office building's focus on sustainable design, says Hines, with developer Boston Properties aiming for a LEED Silver certificate. Slated to open next spring, the structure is 100% committed to three tenants. DTZ FHO is leasing agent.

Reservoir Woods developer Paul Marcus, president of Davis Marcus Partners, acknowledges that the sustainability movement is fluid. "I've never seen anything in our industry evolve this quickly," he says, adding, "the pressures are enormous, because you have no choice but to keep on top of it." DMP and financial partner Prudential Real Estate Investors responded aggressively by making one property under way at 850 Winter St. eligible for a LEED Silver. The landlord is going one better than that for the 300,000-sf National Grid structure by pursuing a LEED Gold certificate. It is the first multi-tenanted office building in New England to seek that designation, says Marcus, concurring that played well in negotiations with National Grid.

A spokeswoman agrees that National Grid was seeking a high level of sustainability in its headquarters, but stresses that the firm is not new to the table, having this year marked its 20th anniversary championing an energy conservation campaign that has saved New Englanders an estimated $2.5 billion. "This has been important to us for a very long time," she says, pushing sustainability issues to the forefront of the negotiations and helping Reservoir Woods in securing the lease. "It was a big part of the decision," she says, with National Grid aiming to cut its energy use 60% by 2050. Being in a LEED Gold building should help that campaign, she says, and could enhance the company's energy savings message.

The spokeswoman defends the financial aspects of the Reservoir Woods lease, shrugging off complaints from some about the firm taking space in suburban Boston's most expensive office market, with the Reservoir Woods deal said to be exceeding $40 per sf. National Grid already owns a 280,000-sf facility in Westborough, a market sporting plentiful space at a deep discount to Waltham. According to Barry, however, Waltham makes more sense geographically for customers and employees after a series of mergers since 2000 expanded the company's presence into New Hampshire and northern Massachusetts. About 1,700 staffers will move to Reservoir Woods upon its opening in mid-2009.

The ability to develop a modern headquarters from the ground up was also appealing to National Grid, according to the spokeswoman, who says the firm anticipates greater flexibility in space layout, as well as cost savings from the energy efficiencies. The commitment also locks its space costs in for an extended period, she notes.

Marcus declined to discuss lease terms, but insists that the tenant struck an economical agreement. Phil DeSimone of Jones Lang LaSalle represented the tenant, while Andrew Majewski and Kerry Olson of CBRE/New England were brokers for the property. As for the blockbuster deal itself, Marcus concurs that the pact has made for an enjoyable start to December. "We're really excited," he says. "I think National Grid is very happy with the way things worked out, and I know we are."

As for the sustainability aspect, Marcus says he only anticipates the issue will grow. That notion even prompted a review by the company that began this week to see whether the Reservoir Woods building at 850 Winter St. can be upgraded to the LEED Gold standard prior to its opening next spring. "I don't think anybody really knows where this is going," he says of sustainability. The parameters "are changing as we speak."