Value Beyond Cost Savings - Green Building Finance Consortium

Value Beyond Cost Savings: How to Underwrite Sustainable PropertiesWhole Building Design Guide: http://www.wbdg.org/about.phpThe WBDG is the only web-based portal providing government and industry practitionerswith one-stop access to up-to-date information on a wide range of building-relatedguidance, criteria and technology from a 'whole buildings' perspective. Currently organizedinto three major categories—Design Guidance, Project Management and Operations &Maintenance—at the heart of the WBDG are Resource Pages, which provide summaries onparticular topics.Another key source of sustainable features ideas and insights are case studies. Most of thecase studies performed to date are sufficient for use in identifying and screening ideas, butare not sufficiently detailed or financially oriented to be used effectively for propertyspecific financial analysis. A description and assessment of some important case-studydatabases is presented in Appendix III-B in Expanded Chapter III. Additional citations ofcase studies are identified in the Consortium’s Research Library and Industry Linkssections of their website under index code 15.2.There are lists and menus to fit most any level of detail and specification. The one list thatis not available is the precise list of strategies and features appropriate for your property.That list will have to be determined through an integrated design/values process where youmeet with the relevant stakeholders to decide what it is you value and how you want topursue those values through sustainable design, construction and property operations.3. Sustainable Property Features and Building OutcomesA sustainable features based approach to understanding sustainability is a good first step.However, from a financial perspective, the best way to deal with all the complexities of thevarious features is to focus on actual building performance. The challenge with thisstrategy is that so much sustainable investment involves forecasting how changes oradditions to the sustainable features in a building will change energy or water use.Accordingly, underwriters and appraisers will need to conduct their due diligence usingenergy performance forecasts prior to getting actual building performance data in manycases. We address this issue in detail in Chapter VI, Section E: “UnderwritingEnergy/Carbon Reduction Investment” in both this book and Expanded Chapter VI.D. Measuring a Property’s Sustainability1. Financial Analysis Requires Broad Knowledge of Alternative ApproachesMeasuring property sustainability is critical to financial analysis and valuation. Thechallenge is that there is literally hundreds of sustainability assessment and certificationsystems in use today. While we understand the substantial number and complexity ofsystems can be daunting, a specific property will have a unique geography, property type,22