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50 Shades of Green

The sense of smell conjures up memories and visions of years ago, whether it be opening a fresh jar of peanut butter, twisting the key on a fresh can of coffee, or unsealing a brand new box of crayons. Crayons represented the magic of childhood in that they unleashed the creative instinct in all kids. Those boxes of 64 perfectly sharpened rods of colored wax along with a new coloring book transformed a rainy Saturday into a colorful journey of imagination. The greenies were, by far, my favorite color palette and, to this day, remain my favorite color of the spectrum.

Green has taken on a new dimension in recent years in terms of high performance buildings, or “green” buildings and sustainability.  Although the terms “green” and “sustainable” are often used interchangeably, a sustainable building is based on design and construction processes that make the building entirely self-sufficient in a way that allows it to maintain equilibrium in perpetuity. Very few buildings even come close to meeting these goals. But high performance green buildings place most emphasis on efficiency in all aspects of design, construction, and operations.

There are a variety of rating systems that rank buildings according to their sustainable attributes. Some of these rating systems that are common in the United States include LEED® (Leadership in Energy and Environmental Design), Green Globes®, and Energy Star®, although Energy Star® deals only with the identification and promotion of energy efficient products and practices and not the whole building.

The appraisal group at High Associates Ltd. recognizes the various features of high performance properties and discusses those attributes in appraisal reports as they relate to the property being appraised. These characteristics may apply to site development in terms of building placement on the site, water features and storm water systems, and parking areas.

Water efficiency and energy efficiency are also key elements under scrutiny in that these factors may play a role in the total energy consumption of the building. Replacing older fluorescent fixtures with more efficient T5 or T8 fluorescent tubes or LEDs will save substantial electric costs and provide a relatively quick payback to the property owner. Motion detectors on water faucets and other plumbing fixtures may also provide cost savings in the operation of the property, particularly in buildings that have a large workforce. The appraiser should be able to quickly identify these efficiencies and appropriately account for them in the appraisal report.

Other factors that the appraiser considers include indoor air quality and the materials used in construction and in tenant finishes. These factors should involve conversations with the property owners since the characteristics of the HVAC systems and types of materials used may not be easily recognized by the appraiser.

Although the central Pennsylvania markets are only in their infancy with high performance commercial development, influence of the green movement is obvious in new construction, particularly in public buildings, as well as rehabilitation of older structures and the retrofit of dated hotels, office buildings, apartment buildings, and schools.

Subsequent articles will discuss additional aspects of high performance buildings and their relationship with the Triple Bottom Line, also known as the Three P’s and the Three Pillars of Sustainability. In the meantime, it is important to discuss your property’s high performance green attributes with your appraiser so that those factors will be considered in the market value of your property.

Coloring outside the lines won’t sacrifice the integrity of your masterpiece, but not accounting for the high performance characteristics of your property may be detrimental to the appraised value of your property.

Eric Lehmayer, MAI / MRICS / LEED AP, Director of Appraisal Services, High Associates Ltd.