Value Beyond Cost Savings - Green Building Finance Consortium

Value Beyond Cost Savings: How to Underwrite Sustainable PropertiesD. Underwriting Service Providers1. IntroductionThe quality and capacity of service providers was identified by our sustainableperformance survey respondents as one of the key factors leading to failure orunderperformance, and also a significant opportunity for risk mitigation through retentionof qualified and experienced service providers. 85 Rapid growth of the sustainable propertymarketplace and a disproportionate level of new products, materials, systems andprocesses enhance the opportunity for service provider underperformance when dealingwith sustainable properties.2. The Sustainable Property Services MarketsThe services required to successfully complete a sustainable project will generally differfrom a conventional project in two key ways: 1) the core service providers will havecertain specialized knowledge about sustainability; and 2) the project will likely requireseveral additional specialized services. Specialized services are required on manysustainable projects because they often have systems, features and verificationrequirements that conventional buildings do not have.For the purpose of this section and the broader purposes of the Value Beyond CostSavings: How to Underwrite Sustainable Properties book, we define the service providermarkets broadly, incorporating a full range of real estate and construction/developmentservices as shown in Exhibit VI-2 below. More specialized sustainability related servicesare presented in bold, further emphasizing the importance of properly underwriting theservices team.The issues of service provider quality and capacity will vary significantly by propertytype, market, and the specific type of service. Given the rapid growth in the sustainablemarketplace, some of the specialty consulting services such as daylighting consultants,commissioning agents, and other sustainable specialists are typically the hardest to find.85 The Consortium conducted a survey of experienced sustainable consultants, developers and investors to assess thosesustainable features and processes that had the highest level of failure and underperformance. The results of this surveyand related research are presented in Chapter IV, Sections D and E, which address sustainable process and featureperformance.158