Book 2 - Appraisal Institute of Canada

Learning Advisory
Spotlight on continuing
professional development
O
ver the past three years, the UBC Real
Estate Division has developed short
courses to meet the continuing professional
development (CPD) needs of AIC members.
These CPD courses have two goals: (1) to refresh
members’ skills and knowledge; and/or (2) to
teach members new techniques and applications
for the evolving marketplace. UBC’s CPD courses
are ‘bite-sized,’ self-paced online courses. There
are more than 20 courses available, with new
additions coming online regularly.
This article highlights three recently developed
CPD courses, with the goal of providing
information on their subject matter – and
hopefully whetting your appetite to learn more.
CPD 125: Green Value – Valuing Sustainable
Commercial Buildings
Global climate change and the sustainability of our
current consumer lifestyles have become mainstream
topics of conversation. Former US Vice
President Al Gore brought widespread awareness
of climate issues to the public in his documentary
film An Inconvenient Truth, while the United
Nations Report on Climate Change has reinforced
the message that the Earth is changing.
This two-lesson course examines how
contemporary environmental issues are impacting
real estate decision-making. The first lesson
explores the features of ‘green buildings’ and
sustainable development. Green buildings aim for
several or all of the following features:
• substantially reduce energy requirements;
• conserve water;
• maximize natural light and views;
• maximize fresh air circulation;
• minimize high energy heating/cooling;
• harvest rainwater for toilet flushing and
irrigation;
• include recycled materials; and
• flexible sustainable designs that can endure
for a hundred years and more.
In Lesson 1, we provide examples of architectural
design and building construction practices that
contribute to a building’s ‘green-ness.’ We also
introduce international standards for rating green
buildings, most notably the Leadership in Energy
and Environmental Design (LEED) program and
the BOMA program.
The second lesson examines the business
case for green building investments. We explore
the additional costs of sustainable building and
compare these against the benefits, both to the
building owner and society at large. We also
investigate the issue of ‘green value,’ whether
or not green features add to real estate’s market
value. Questions to be explored include:
• In the case of feasibility studies, does building
to green standards make economic sense?
• Is the value of a green ‘retro-fit,’ such as energy
efficient lighting, captured in market value?
• How do financial incentives offered by energy
companies, local, provincial, and national
governments and agencies impact green
building economics?
• What additional factors influence the business
decision to adopt green building technologies?
In other words, is green building an
ethical choice and a good financial choice?
Since real estate professionals provide advice to
clients on property value, brokerage, and building
management, an understanding of the ‘green
increment’ will increasingly become an expectation
of a consultant’s due diligence in the future.
Our overall course goal is to explore the concept
of ‘green value’ and shed light on the debate
of whether a ‘green’ premium for commercial
construction is fact or fantasy.
By John Bridal, Manager Program Development Real Estate Division (RED)
Sauder School of Business , University of British Columbia
Note that this course focuses primarily on
commercial real estate, including office, retail,
industrial, and multi-family residential. We leave
residential issues to another related course currently
in development.
CPD 117: Exposure & Marketing Time:
Valuation Impacts
Consider the following appraisal assignments:
• You are commissioned to complete an
appraisal for a house in foreclosure. The
legislation specifies it must be sold at ‘market
value,’ but the bank has instructed you that
they need to recover their money as quickly
as possible and that your appraisal reflect
‘market value based on a 30-day sale.’ Typical
exposure time in this market is 4-5 months.
• You have been hired to complete a valuation of
a single-family dwelling. The intended use of
the appraisal is for relocation purposes and the
intended users of the report are the relocation
company and the company that is relocating
the employee. The property is located in
a small community that typically will only
experience two to three sales per year. The
relocation company asks for a value estimate
‘assuming a marketing period of 90 days.’
Normal exposure is 180 days in this market.
• What special considerations are necessary in
appraising these properties?
• Are these market value appraisal assignments
or something different?
• How can you meet the clients’ needs, but
also protect yourself from potential liability
and a breach of professional standards?
Most appraisal assignments involve estimating
the market value of real property. Whether
explicitly recognized or not, the concept of time
is always intertwined within the definition of
Canadian Property Valuation Volume 52 | book 2 | 2008 Évaluation Immobilière au Canada 37