High Performance Property Valuation and Mortgages

High Performance Property Valuation and Mortgages

Proving the value of investments in high performance building attributes is often difficult due to a lack of communication to key audiences in appraisal and mortgage underwriting fields. Valuation and underwriting of energy performance rely on accurate data and information on the benefits of these attributes and their relation to the impact of energy cost volatility on net operating income. Here we provide a summary of potentially scalable interventions intended to increase data sharing and improve consideration of energy in these processes, including high performance appraisal templates, information on collaborative groups, and guidance documents explaining energy’s role in valuation.

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Value Energy Efficiency: View the Model Scope of Work (SOW)
Financial Ally List

Financial Allies are actively seeking new partners to work with and can help drive energy efficiency success for commercial, multifamily, industrial, and public buildings. 

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Better Buildings partners participate in webinars, peer-exchange calls, meetings, and industry workshops and conferences. Browse upcoming events and opportunities to participate by month.

Alliance Activities

Participate in expert-led technology teams, test out an implementation model, join a technology campaign, or take part in a technology challenge or demonstration.

Featured Solutions

This summary includes a review of existing evidence of Green Labels’ impacts on revenue increases, cost savings and corresponding asset value, and identifies gaps in existing research.
Do you ever wonder how energy efficiency and sustainability efforts are impacting the value of your properties? This webinar focused on energy efficiency and sustainability in the appraisal and valuation industries.
The resources in this toolkit were reviewed and selected by the working group participants, and are designed to help simplify information gathering processes, provide industry background and context for owners, lenders, and appraisers, and link to key training opportunities that will assist appraisers in gathering the data and developing the skills needed to competently appraise high performance buildings and building attributes.

Other Resources

Additional Information

Appraising High-performance Buildings: An Information Atlas for Practitioners
This web-based "Information Atlas" offers an array of useful resources for appraisers of green and high-performance homes and non-residential buildings.

IMT Green Building and Property Value Primer
The Retail Green Lease Primer is a two-page document that helps guide retailers and retail owners to improving the efficiency of their facilities. The goal of the document is to educate real estate and leasing agents on the specific retail lease provisions necessary for achieving reductions in energy, waste, and water use—and cost. When it comes to investing in technologies and processes that promote more efficient and sustainable facilities, owners and retail tenants often don't know how to start the conversation. This resource aims to solve this problem by presenting the 13 most important lease topics in a clear and simple format.

ENERGY STAR Financial Evaluation Tools
Tools include the Financial Value Calculator, the Cash Flow Opportunity Calculator, and the Building Upgrade Value Calculator.

Valuation of Green and High Performance Property: Background and Core Competency
This document offers background and core competency guidance on high performance buildings.

Case Study: Financing Energy Efficiency Through Mortgage Loans
This market analysis paper from IMT examines the current landscape for building owners and lenders seeking to integrate energy efficiency and utility savings into building assessments and retrofit plans, and to utilize the data to enhance traditional loans.

The Economics of Green Building
Published in The Review of Economics and Statistics, 2013. 
By Piet Eichholtz, Nils Kok, and John M. Quigley.

Doing Well by Doing Good? Green Office Buildings
Published in The Review of Economics and Statistics, 2010. 
By Piet Eichholtz, Nils Kok, and John M. Quigley.

Building Performance Database (BPD)
A support platform to evaluate the benefits and risks of energy efficiency projects and make informed decisions on investing in these improvements.

Increasing Property Value with Energy Saving Practices: Hines Retrofit Case Study 
Hines partnered with the Department of Energy (DOE) to develop and implement solutions to retrofit existing buildings to reduce energy consumption by at least 30% versus requirements set by Standard 90.1-2004 of the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), the American National Standards Institute (ANSI), and the Illuminating Engineering Society of North America (IESNA) as part of DOE’s Commercial Building Partnerships (CBP) Program.

Recognition of Energy Costs and Energy Performance in Real Property Valuation
IMT and the Appraisal Institute published this paper seeking to enhance credibility of property valuation by helping appraisers and others find, understand, and use available information on energy performance in commercial buildings.

Green Building and Property Value
This document, published by IMT and the Appraisal Institute, serves as a primer for building owners and developers by providing an overview of the key components for incorporating energy performance into building appraisal and valuation.

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