Real Estate Journal — Professional Services — November 27 - December 10, 2015 — 7A
www.marejournal.com
M id A tlantic
V aluations
he first article I wrote about green buildings was published four By Steven J. Schleider, MAI, FRICS, LEED-AP BD + C, Metropolitan Valuation Services The Green Premium on Building Value T on energy efficiency only.
seem, however, that in a static model tenants are willing to pay a premium for energy efficiency. Moreover, the premium related to energy rating increases with the level of certification which seems to suggest that the more efficient a building is the larger the value created.” As a green building apprais- er, I have found sustainability metrics have become more important in commercial prop- erty investment decisions. We are seeing a marked increase in commercial appraisal as- signments where green tech- nologies are noted with signifi- cance in the initial Request for
(valuation work) Proposal stage. As research continues to grow, the green building revo- lution has become a steady and assured evolution. We have reached a critical mass of profit and not-for-profit propo- nents, sustainability-educated and experienced professionals, government mandates and client/tenant preferences to say that we are traveling the right road toward the destina- tion of living a healthier, more sustainable life. Steven J. Schleider, MAI, FRICS, LEED-AP BD + C is president of Metropolitan Valuation Services. n
“Measuring Green Value: An International Perspective” which studied the U.S. as one of three core markets including the “rapidly growing body of research on the economic value of certification premium in the office market.” Their findings said there is a “significant rental premium and increase in market value (selling price) as well as a corresponding discount in utility expenses.” The report also showed an interesting juxtaposition. “As in an energy efficient building the charges are expected to be low- er, the difference can be passed on to the customer. It would
The number of LEED-cer- tified buildings in New York City and especially Manhattan office buildings has increased exponentially. Most are Silver or Gold certified but there is a smattering of Platinum includ- ing The Solaire (the first eco- advanced residential building in the U.S. which I appraised twice); Tiffany &Co.; Skanska; Chase, among others; and the big daddy of them all, One Bry- ant Park, the first Platinum LEED skyscraper. The Royal Institution of Chartered Surveyors (RICS) published a report entitled
y e a r s a g o . Its timing re- flected a “per- fect storm of eco-laws” in- cluding New York City’s then new Lo- cal Laws 84, 85, 87 and 88.
Steven Schleider
I put forth the opinion that going green increases property value and referenced a “grow- ing body of evidence” to support that educated opinion. But in 2011, although it was growing, there wasn’t much evidence available. Green was still new. The results of decreased opera- tional costs and increased rents and building value had yet to be deeply researched, which is why my article received consid- erable attention, even winding up for sale on amazon.com. I wrote then that “Measure- ment standards, a larger com- pilation of hard data, sales and lease market reports, studies and an understanding of how sustainability doesn’t often show up in depreciation ac- counting, will all come into play in the accurate valuation of green properties.” Now, at the end of 2015, I’m still certain going green increases property value ex- cept now there are in-depth research and evaluation stud- ies, years of supportive data and numerous books on the subject of green building and value. My opinion is no longer a stretch, but proven reality. In 2013, the World Green Buildings Council published a detailed 124 -page report, a compilation of research from numerous studies. Among its findings were green buildings need not cost more than conventional buildings; it was getting less expensive to build green; supply chains are more able and adept; and, while a less visible financial benefit, green buildings provide greater health and productivity. The study also said green buildings make more money for owners. This was also my opin- ion in 2011 as New York City’s only LEED-AP BC+D commer- cial real estate appraiser. Certifications, primarily LEED and Energy Star, have made a huge difference in cat- egorizing green and energy sav- ings benefits. While LEED in- cludes all aspects of a building’s eco profile including energy efficiency, Energy Star focuses
Commercial Real Estate Valuation Market Studies Martin B. Levine, MAI – Chairman Steven J. Schleider , MAI, LEED-AP BC+D - President
Feasibility Analysis Trusts and Estates Litigation Support
METROPOLITAN VALUATION SERVICES, INC. 44 East 32nd Street, New York, New York 10016 Phone (212) 213-8650 • Fax (212) 213-8621
Made with FlippingBook - Online catalogs