Value Beyond Cost Savings - Green Building Finance Consortium

Value Beyond Cost Savings: How to Underwrite Sustainable Properties−−Environmental certification levels are not comparable, because they can bebased on entirely different combinations of sustainable features and outcomes;Many properties with valuable sustainable features may not be certified.• The influence of sustainability on value can be analyzed. For example, every officebuilding has a unique combination of features and attributes, but somehow the industryis able to analyze and value office buildings.• LEED certification has become the definitive market leader in the U.S. and a growinginfluence internationally for the institutional investment market, and, to a significantdegree, the owner-occupant market. While certifications like LEED and other leadingcertification systems around the world cannot be the sole basis for analysis, they havesignificant value independent of the attributes or performance of the certified property.• Sustainable certificates with the strongest market acceptance by regulators, users, andinvestors will have the highest values independent of the sustainable features orbuilding performance. This “premium” for a specific certification will varysignificantly over time by property type, market, and level of certification.2. Key Steps to Evaluate Environmental Sustainability CertificationsThis section provides a brief outline of key questions to ask when involved in evaluatingthe effect of sustainable certifications/requirements on value.1. What are the key sustainability features and attributes of the property?2. What are the key attributes/certifications required by regulators?• Building certifications?• Products and materials?• Performance, outcomes?• Processes, operations?• Today versus the future (risk analysis)?3. What are the key building features and attributes or certifications required by spaceusers in your building?• Global Reporting Initiative?• Carbon disclosure requirements?• Health and safety concerns?• LEED certification?• Energy costs?28