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Valuing sustainable Leases: understanding Green Lease structure is essential as appraisers learn to value high-performance buildings.

Publication: Valuation Insights & Perspectives
Publication Date: 22-MAR-09
Format: Online
Delivery: Immediate Online Access
Full Article Title: Valuing sustainable Leases: understanding Green Lease structure is essential as appraisers learn to value high-performance buildings.(feature)

Article Excerpt
When it comes to the valuation of "green" commercial buildings, appraisers face new challenges. Finding comparables remains difficult. The cost method does not adequately reflect long-term benefits from upfront costs for smart capital improvements. The income approach seeks energy efficiency as a way to demonstrate reduced costs and a boost to net operating income over time but that also has limitations.

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New technologies and sustainable management techniques can provide greater conservation, efficiency and control over energy, water and material resource costs that lead to greater values. Unfortunately, our traditional lease structures fail to align the benefits with the burdens of those objectives. The "Green...

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