In a recent press release, the Appraisal Institute announced that it has published a new guide with both the Institute of Market Transformation and the District of Columbia’s Department of Energy and Environment that’s intended to help lenders better understand the valuation of high-performance buildings.
Known as the “High-Performance Buildings and Property Value: A Primer for Lenders”, this new guide will help industry participants accurately assess green and energy-efficient building features. This is important, according to the three organizations, because collateral risks may be reduced if green premiums on such properties are being paid in the marketplace.
“Credible appraisals must be well supported by market data and information,” says the new guide. “In the case of a high-performance building, this includes information on the subject property that helps explain why this guide is unique from its conventional peers.”
The new guide highlights the four components of value—revenue, occupancy, operating expenses, and risk—and states that these categories also make the case for green appraisal value and should be considered by lenders during both the appraisal and underwriting processes.
The guide also provides lenders with advice on how to work with owners and appraisers in the following areas: determining the scope of services, finding a qualified appraiser, making a data request list, and interviewing an appraiser or appraiser manager.
To view the new “High-Performance Buildings and Property Value: A Primer for Lenders” guide in its entirety, click here.