This study examines the transformation of Green Leases in German commercial real estate from voluntary market initiatives to regulatory compliance necessities. The research investigates how EU and national regulatory frameworks – EU Taxonomy, SFDR, CSRD, and Germany’s GEG – drive contractual innovation in sustainable property management. Using qualitative methodology, this study conducts comprehensive document analysis of academic literature, legal documentation, and industry guidelines (2015-2025), examining regulatory impact mechanisms through thematic content analysis. The findings reveal a fundamental paradigm shift where regulatory requirements have become the primary driver of Green Lease adoption. The study identifies a systematic “regulatory cascade effect” whereby EU-level regulations translate into fund-level compliance requirements, subsequently driving property-level contractual obligations. The EU Taxonomy's “Do No Significant Harm” principle creates continuous compliance obligations requiring contractual mechanisms. This study contributes to academic discourse by systematically documenting the transition from voluntary to regulatorily-driven sustainability. The identified regulatory cascade effect provides a framework for understanding similar transformations in other European markets, establishing Green Leases as essential instruments in the emerging regulatory compliance architecture for sustainable real estate management.