Plus, more than 6,000 green buildings
are certified by Energy Star—the U.S. government’s energy-saving rating system—
including more than 2,000 office buildings, and glimmers of data that can be
used for appraisal methods are emerging.
A recent research study commissioned
by RICS found that U.S. office buildings
with an Energy Star rating attracted rental
premiums of 3 percent per square foot
compared with nearby non-energy-efficient buildings of the same size and
function. The study also found that the
selling prices of Energy Star-rated buildings
were 16 percent higher. (For more information on the RICS study, see page 15.)
The RICS study also discovered,
somewhat surprisingly, that LEED-rated
buildings did not share the same financial
advantage over non-LEED buildings,
suggesting that energy savings far surpass the broader green goals (resource
conservation, for instance) embodied in
LEED buildings. This seems to contradict
a 2008 CoStar Green Study that found
a LEED rating indeed equals higher rents
and higher sales prices. As more data is
collected, the true value of green-rated
buildings will become clearer.
Sustainability Real Estate Designation Programs
Compiled by Jason La Fleur, LEED AP
In addition to the Appraisal Institute’s existing seminars on valuing green buildings
(see page 16 for details), here are some of the other leading credentialing programs
in sustainability (the Appraisal Institute does not endorse any third-party credential
programs):
LEED AP (Accredited Professional): www.gbci.org
LEED GA (Green Associate): www.gbci.org (more appropriate for appraisers)
BREEAM Assessor: www.breeam.org
NAR GREEN Designation: www.greenresourcecouncil.org
NAHB Certified Green Professional: www.nahbgreen.org
Certified Green Broker: www.greenbrokereducation.com
EcoBroker: www.ecobroker.com
Institute of Green Professionals: www.instituteofgreenprofessionals.org
Nontraditional Roles
But until the number and quality of
comparables for green-rated buildings and
homes saturates the market, the opportunity for commercial appraiser involvement
will likely come on the ground floor, during the design stage.
In LEED buildings, for instance, collaboration at the very beginning is necessary
for the project to include enough “points”
to earn the level of certification desired:
certified, silver, gold or platinum.
The collaboration typically involves the
designers, engineers, contractor, HVAC
contractor, other subcontractors and an
official LEED consultant (qualified by
USGBC and designated an accredited
professional, or LEED AP). A green building operates as a system, where one factor
(the heat-resistive value of wall insulation,
for instance) will affect other factors (such
as the sizing of the HVAC system).
Why not have an informed appraiser
at the table? asks Thomas Dorsey, MAI,
SRA, of Wachovia in Charlotte, N.C. For
instance, while the push to gain LEED
points skews buildings toward the central
business district, another location may
have a better rental potential, which is
something an appraiser would know
something about.
Likewise, a typical LEED AP may suggest orienting a building a certain way
on a lot for energy reasons (aligned with
the arc of the sun), while another orientation, which would not earn LEED
points, might point the building toward
profitable views or beneficial services.
“It ought to be part of the discussion,”
he says of the perspective appraisers
Sustainable Property
Rating Systems
There are a variety of ratings systems
used for buildings, the standards of
which overlap, but vary slightly from
system to system. Some of the leading ratings systems are detailed at:
www.energystar.gov
www.usgbc.org
www.breeam.org
www.bomabest.com
www.thegbi.org
www.nahbgreen.org
www.natresnet.org
could bring to the planning phase. “But
it’s just not thought of.” According to
Dorsey, a LEED AP: “Appraisers are
terribly underrepresented in the green-building process.”
In Houston, Appraisal Institute associate member John Fisher, a senior commercial appraiser with O’Connor & Associates, earned his LEED AP designation,
arguably the first commercial appraiser
in Houston to do so. He is a consultant
for Bayou Green Apartment Homes, a
212-unit luxury multifamily development
slated to be finished next year.
Fisher agrees with Lowe that the opportunities for traditional appraisal work
in the green sector are limited, but the
opportunity now is to achieve LEED
Green Associate (GA) status and serve
as a consultant. Eventually, though, the
volume of green buildings will call for
educated appraisers.
“As more green projects land on lenders’ desks,” Fisher says, “they will favor
appraisers that understand the green features, energy savings, etc., that translate
into increased market value for a property.” Plus, Fisher says having a LEED
accreditation puts his company “ahead
of the curve to our clients. We are also
positioned as a firm that offers a wider
range of services than our competitors.”
Client-Building Benefits
Beyond direct consultant roles for
appraisers in green-building projects, get-
