Underwriting Sustainable Commercial Properties: Financing: NAR Annual 2011 Session

Solar Panel Array

A blue-ribbon (green-ribbon?) panel led today by Peter L. Mosca, GREEN, SFR at NAR Annual 2011 went a long way in exploring how to properly value green and sustainable commercial property from a range of angles, including appraisal, regulatory compliance, policy and operations. The panel included:

Theddi Wright Chappell, CRE,  Senior Managing Director and the National Practice Leader of the Green Advisory Practice at Cushman Wakefield

Bill Conley, Bill Conley CFM, CFMJ, LEED AP, IFMA Fellow, owner/CSO of CFM2, a facility management & Sustainability Consulting company based in Orange County, Calif.

John Ellis, CRE, MAI, FRICS,  Managing Director of Integra Realty Resources – Los  Angeles

Mike Merrifield, CCIM, Independent Investment

“Cost effective,  structured and designed sustainable properties that focus on health and productivity benefits will continue to make money,”  said Mosca, leading off a free-wheeling conversation between the panel and the audience on a range of topics that I couldn’t hope to put in a single post to The Source, so rest assured there’s more coverage coming.

On the topic of finances, Mosca cited a new study by the Royal Institution of Chartered Surveyors that “showed new evidence on the financial performance of green office buildings in the United States.  Green buildings performed better than nongreen (the term “brown building” came up; use at your own risk) commanding rental rates substantially higher than those of competing buildings.”

John Ellis responded by citing a recent study by CoStar’s CEO Andy Florance that “analyzed the real value of LEED certification, finding that these building got 10-15% premium at time of resale…It is becoming clear to the tenants what the economic impact is of having an energy efficient building.  They are migrating toward the LEED certified buildings and seeing higher occupancy, higher property values and sale prices.”

Later, Bill Conley raised the interesting effect of green on office property: “It’s been said you take a brown class C building and turn it into a class A building”.

Watch for more posts at The Source about the best practices in green and sustainable building valuations and management.

Get a full copy of the panel discussion led by Peter Mosca at PlaybackNAR. 


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