Value Beyond Cost Savings - Green Building Finance Consortium

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Value Beyond Cost Savings: How to Underwrite Sustainable PropertiesHybrid ArrangementsHybrids of each of the four are also used in the industry today.Project Delivery Best Practices-Risk Mitigation 14Each of the processes discussed above has pluses and minuses. Best practices to reducerisks include:• Clear contract specification. Contractors limit risk by following constructioncontracts closely. Green or sustainability are not clear terms and should be clearlydefined in the context of the project. Responsibility (ownership) of each LEEDpoint should be spelled out in a separate exhibit.• Specific wants/needs of parties should be spelled out in the contract; performanceor certification expectations should be clearly defined.• Avoid over-reaching in marketing and representation.• Do not accept standard contractor specification of “new materials without defects”if recycled products/materials will be used.• Explicitly allocate the risks of new technology—consider performance testing ofsystems and technologies.• Service provider “green damages” should be limited as to amount (liquidateddamages) and amount of corrective work.• Regardless of project delivery model, follow key Integrated Design best practices.• Contractors can manage their obligations through use of quality control/assuranceplans, a LEED action plan, Credit Management processes, and related projectmanagement techniques and documentation of work effort.• Consider use of “At Risk” construction management process.• Contractors/architects should stay away from, or only provide after carefulconsideration and definition, elevated standard of care guarantees/warranties—andcarefully review implications of such warranties/guarantees on professionalliability insurance14 This section is informed by a number of articles, experience, and presentations at GreenBuild 2009. See specifically“The Legal Risk is Building Green: New Wine in Old bottles?”, a USGBC Panel Discussion, April 2008.http://www.greenrealestatelaw.com/2009/04/usgbc-paper-legal-risk-in-building-green/38
Value Beyond Cost Savings: How to Underwrite Sustainable PropertiesResourcesGreen Building Finance Consortium Research Library and Industry Links. (Index code24.2: Integrated Design)http://www.greenbuildingfc.com/Home/ResearchLibrary.aspxWhole Building Design Guide:http://www.wbdg.org/Integrated Design for Sustainable Buildings:http://www.greenbuildingfc.com/Home/DocumentDetails.aspx?id=188ASHRAE GreenGuide (2 nd Edition):http://www.ashrae.org/publications/detail/16082Energy Design Resources Design Brief: Integrated Building Design:http://www.fcgov.com/conservation/pdf/es-012daylighting.pdfSustainable Building Technical Manual:http://www.wbdg.org/ccb/browse_doc.php?d=4156Environmental Building News: Integrated Design:http://www.buildinggreen.com/auth/article.cfm/2004/11/1/IntegratedMarket Transformation to Sustainability Guideline Standard - Whole System IntegrationProcess:http://www.greenbuildingfc.com/Home/DocumentDetails.aspx?id=908b. Contracts/Legal 15Sustainable properties introduce important legal and related contractual issues that increasedevelopment risk if not appropriately mitigated through improved contracts, training, andbehavior. Three key issues include:• Design firm professional liability• Construction contract risks• Marketing Risk: misrepresentation and fraud in marketing and leasing protocols15 This section provides an overview of select sustainability related issues but is not a complete or detailed treatment ofthese issues and appropriate legal advice is recommended when addressing these and other legal issues.39
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Appendix FSustainable Property Fina
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Appendix GSustainable Property Cost
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Appendix HDiscounted Cash Flow Anal
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Property Type: CBD OfficeSquare Fee
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Value Beyond Cost Savings - Green Building Finance Consortium

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