It's clear that energy-efficient features can increase a property’s value. But what’s not so obvious is how each element contributes to the overall boost -- and how property owners can use this information to maximize their efforts for the largest payoff.
Changes to a building’s lighting, windows and HVAC system can all provide payoffs in lowered utility costs, but at different rates. Increased value can also be derived from the occupants’ comfort and health in addition to increased attractiveness.
And as the market share for energy-efficient buildings continues to grow, the value of green buildings will rise, while the value for buildings with poor energy performance will drop.
So says a new report co-authored by the Appraisal Institute, a global association of professional real estate appraisers, and the Institute for Market Transformation, a Washington, DC-based organization focused on energy efficiency. Titled the “Recognition of Energy Costs and Energy Performance in Real Property Valuation,” the report aims to help real estate appraisers assess the effects of energy efficiency on a property’s value.
According to the report, energy efficiency has only recently been recognized as a factor that can affect a property’s value. Increased environmental awareness, evolving social and cultural priorities, and technical expertise are some of the reasons for the shift.
“Now more than ever, this value is the reflection of real market demand and willingness of tenants and investors to pay more for efficient and green buildings,” the report says.
Photo of building covered by grass provided by Eugene Sergeev via Shutterstock
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