Value Beyond Cost Savings - Green Building Finance Consortium

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Appendix FSustainable Property Financial Analysis AlternativesAnalysis/Model Description/Commentary Key Links/Exampleson BIDS:http://www.purdue.edu/discoverypark/energy/events/green_building_workshop_jan2009/presentations/HighPerformance%20BIDS_MingQu_Jan22_F.pdfExamples of general productivity related analysis are presented in “TheCosts and Benefits of Green Buildings,” Gregory Kats, October 2003,pp 59-60:http://www.cap-e.com/ewebeditpro/items/O59F3259.pdfThis cost-benefit study of 30 green schools in ten states provides aframework for analyzing productivity gains associated with higherlifetime earnings, asthma reduction, colds & flu reduction, and teacherretention. [“Greening America’s Schools – Costs and Benefits,”Gregory Kats, October 2006, pp 12-14] http://www.cape.com/ewebeditpro/items/O59F12807.pdfThe University of California’s Center for the Built Environment isinvolved in many research activities regarding building performance,including significant research on occupant satisfaction and productivity,which is available on their website:http://www.cbe.berkeley.edu/research/research_ieq.htm.6. Health CostSavings AnalysisHealth cost savings analyses are driven by measures of healthimprovement—reduced absenteeism; reduced healthexpenditure costs for individuals, companies, or the public;reduced severity of certain health conditions, etc. Measures ofimprovement are then monetized by looking at the specificpopulation of building occupants relative to theircompensation, health costs, demographics, etc. to get anestimate of potential benefits. Next, it is important to allocatethe benefits to the individuals, companies, or the publicappropriately, to understand how potential health cost savingswill influence sustainable property investment decisionmakers.(See more detailed analyses and discussion of theseissues in Chapter V, Section D.4.)The key criteria for evaluating the quality of health orproductivity sub-financial analyses is whether it producesinformation that would influence sustainable property decisionmakers,or would be expected to influence potential tenants.GBFC has identified over 200 health and productivity related buildingstudies. These studies are identified, and where possible links to actualstudies are provided.http://www.greenbuildingfc.com/Home/ResearchLibrary.aspx .A good source for independent opinion and access to research on theeffects of Indoor Air Quality on health and productivity is provided at theIndoor Air Quality (IAQ) Scientific Findings Resource Bank (IAQ-SFRB).The IAQ-SFRB provides information summarizing the state of scientificknowledge about the relationships between people's health andproductivity and the IAQ conditions or associated buildingcharacteristics in which the people work or reside. When possible,these relationships are expressed in quantitative terms using graphics,charts, or equations. The summaries also include brief descriptions ofthe actions that may be taken to improve the pertinent aspects of IAQ,including those related to building design, construction, operation,maintenance, and occupant activities. This web site also provides linksfor downloading published journal articles that were developed242
Appendix FSustainable Property Financial Analysis AlternativesAnalysis/Model Description/Commentary Key Links/ExamplesAccordingly, information that is as specific to the subjectproperty as possible, with realistic, unbiased interpretations ofpotential health or productivity outcomes, will be mostpersuasive and valuable. To the extent credible estimates ofthe potential magnitude of benefits can be assessed, that canalso be important.specifically for the IAQ-SFRB project. All of the information provided inthe IAQ-SFRB has undergone review by multiple experts other than theauthors. http://www.iaqscience.lbl.gov/Carnegie Mellon’s BIDS (trademark for Building Investment DecisionSupport, as discussed above in the productivity benefits section, is alsois a good resource for information and analytic methodologies lookingat feature based health impacts.One of the key features of the BIDS tool is its life-cycle assessment ofthe value of features or systems. The results are calculated for eachfeature or system utilizing case study/research findings and BIDS “lifecycle assumptions” which factor in average salaries, building size,health data, and other demographics to calculate the benefits that canbe compared to cost for the feature or system.7. Government/UtilityIncentives andRebates AnalysisDepending on the specific type of sustainable project, and thelevel of sustainability, it may generate substantial publicbenefits including reduced infrastructure costs, environmentaland resource conservation, improved land use, less or moremanageable climate change, economic benefits, and securitybenefits.If a building owner can clearly and factually articulate thepublic benefits that arise from their building, they are morelikely to convince regulators, tenants and investors to pay forthose benefits. Such “monetization” of public value is createdfrom governments or utility companies through enhancedentitlements/permitting, public grants, favorable financing, taxbenefits, and carbon credits or payments, and from privatecompanies through their contribution to Enterprise Value andresulting increases in space user demand.Sophisticated sustainable property investors and developerswill conduct their own detailed assessment of the publicbenefits of their projects to enable clear articulation toregulators, potential tenants, employees, and capital sources.The financial analyses of these benefits for a specific propertyrequires a close look at the sustainable thresholds required toachieve benefits with the specific governments/regulators inSubstantial resources identifying the many types of incentives/subsidiesare indentified in the Green Building Finance Consortium’s website,under Research Library and Industry Resources code 11.0. Selectexamples are presented below.The database of State Incentives for Renewables and Efficiency is themost comprehensive State-by-State listing of incentives. State, localand utility incentives are identified. http://www.dsireusa.org/Mark Jewell of RealWinWin presents “Best practices for finding andapplying for Rebates. A bit dated—from 2005, but still some goodpoints.http://www.realwinwin.com/White_Papers/0402_Show_Me_the_Money.pdfRebates for 26 different types of features and systems are identified onRealWinWin website.http://www.realwinwin.com/threelinks_CorporateClients_RebateAdmin.htmThe ICLEI website is a particularly good source of local governmentsustainability information. http://www.iclei.org/The US Green Building Council also has a public policy searchable website database that is very helpful:243
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Appendix HDiscounted Cash Flow Anal
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Property Type: CBD OfficeSquare Fee
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