|Title||Valuation of Green and High-Performance Property: Commercial, Multi-Family, and Institutional Properties|
|Year of Publication||2018|
|Institution||The Appraisal Foundation|
In response to market demands as propelled by public policies and voluntary rating programs and economic interest, commercial and multi-family buildings increasingly incorporate high-performance (aka "green") attributes that are beyond base code requirements. The primary goal of pursuing green building strategies is to reduce operating costs, increase net income, improve indoor environmental quality, and/or achieve a reduction in life-cycle environmental impacts. Indeed, the marketplace is gradually moving towards a "new normal" in which non-green buildings will be regarded as obsolescent, and undervalued in that regard.
Green attributes reflect a wide continuum ranging from modest individual upgrades of otherwise conventional buildings to comprehensive integrated design and operational strategies that are driving buildings towards zero net energy/water/waste capabilities. Maintaining competency in this rapidly evolving market segment is essential—competent appraisers are required to: 1) access and comprehend new information either directly or via third-party experts; 2) use refined market segmentation when evaluating the subject property's market position, financial prospects, and risk profile; and 3) incorporate this analysis into the valuation assignment.
Appraisers should note that assigning zero value or otherwise "ignoring" green and high-performance attributes requires the same level of market validation and support as assigning value to such attributes.