New Guide Helps Appraisers Factor Energy Efficiency into Valuations
Energy costs are the single largest expense for commercial buildings. IMT seeks to develop and deliver new methods and approaches for appraisers and lenders to use in considering the influence of energy performance on commercial and residential property values. IMT works with appraisers, real estate agents and other real estate professionals to increase the recognition of energy costsand energy performance in commercial property valuation. IMT‘s work in this area includes research, continuing education for professionals and promoting enhanced methods of documenting and benchmarking energy performance.
NEW GUIDE TO APPRAISING ENERGY-EFFICIENT BUILDINGS – RELEASED MAY 2012
IMT partnered with the Appraisal Institute to produce this updated guide, which will help appraisers assess the impact of energy performance on property value.
Topics covered include: why energy matters for cash flow and net income; how energy performance is assessed; and how energy performance is “benchmarked,” or compared to that of other buildings; and qualifications and certifications of professionals who assess building energy performance. There are also case studies of two buildings that saw quantifiable gains in sale price or appraised value due to energy efficiency.
The guide was unveiled at the 2012 ACEEE Energy Efficiency Finance Forum in Boston.
RATING & DISCLOSURE: Rewarding Efficiency in the MarketYou can’t manage what you haven’t measured. Yet most U.S. building owners, including governments, have not measured the energy efficiency of their buildings, limiting their ability to manage and reduce energy consumption. Rating the energy efficiency of buildings empowers owners with information to set efficiency goals, track building efficiency over time, identify and replicate best practices in building operations, and prioritize investments in energy audits, retrocommissioning and retrofits. These measures can directly and indirectly lead to significantly lower utility bills and higher profit margins. But that’s just half the story. According to research from leading academic institutions, properties with superior energy efficiency ratings have higher occupancy levels, lease rates and sale prices than less efficient properties. Tenants and real estate investors are demanding efficient properties and, in many cases, paying a premium to lease or own where energy costs are lower. Banks and insurance companies are beginning to reward efficient property with better financing and lower premiums. Simply put, efficient buildings are more competitive buildings. This trend will likely accelerate as more buildings are rated and more ratings are disclosed, while also exerting pressure on less efficient buildings to improve their energy performance. |
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New Guide Helps Appraisers Factor Energy Efficiency into Valuations
