Washington, D.C.—The Appraisal Foundation, the congressionally authorized source of appraisal standards and qualifications, has signed a memorandum of understanding (MOU) with the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, to collaborate on issues of energy efficiency and the valuation of green buildings.
Collaborative activities under the MOU will include engaging the appraisal community as well as all three of the Foundation’s independent boards relating to applicability of the existing standards to the valuation of green buildings. Activities may include development of databases, through the Department of Energy, to provide data on energy performance for specific building types and upgrades, as well as an educational curriculum relating to energy performance and sustainability in commercial buildings.
“As many of the geographical real estate markets and property-segments continue to work toward recovery, building cost savings and annual operating efficiencies remain important line items of focus for project owners, investor-buyers, and lenders who underwrite new and existing real estate projects,” John Rossi, certified general appraiser with Real Estate Appraisal Associates, tells MHN. “Residential single-family and multifamily housing projects are leading the way in terms of the impact of green building, with other property segments following suit, such as hotels and offices.”
In January the Appraisal Institute launched its Valuation of Sustainable Buildings Professional Development Program, educating appraisers on the intricacies of valuing high-performance residential and commercial buildings. And President Barack Obama recently made green valuation a component of his Better Buildings Initiative. So awareness of the issue’s importance is gaining traction.
These principles and concepts related to green buildings and the prospective associated savings have implications for existing projects,” Rossi says, “in terms of renovations and rehabilitation, economic and financial feasibility in terms of decision making, and also significant implications in terms of feasibility for the development of new projects in many markets.”
He adds, “Both market participants and those involved in evaluating new and mature projects are becoming more keenly aware of the impact of principles and concepts related to Green Buildings. In increasing number of market participants are even requesting additional consideration be provided such known items in the analysis and valuation of projects. Many of the proposed and adopted features often warrant particular consideration in relation to project feasibility and prospective underwriting. Most well-known features are those that directly impact upon lowering long-term operating costs.”