BUILDING ENERGY - Spring 2018 - 23

QUANTITATIVE AND
QUALITATIVE UPGRADES
Federal bank regulators expect credible proof
of loan collateral value, so not all upgrades have
the same opportunity to fit into the appraisal
process, which is constrained by both dollars and
time. "Green"/HP upgrades fall into three basic
categories. My focus will be on "hard," easily
measured benefits impacting net operating
income (NOI), like the annual "solar NOI" from
a solar PV system. The next type of upgrade,
which can be more difficult to track, includes
calculating energy conservation measures
(ECMs), like insulation or HVAC upgrades, each
of which might produce an annual "EE NOI." This
NOI requires not one, but two measures, so the
impact of EE is the net present value today for a
stream of future benefits of events that do not
happen (the delta between what happened and
what did not). Determining this typically requires
an investment grade energy audit (money
well spent).
The third and most challenging upgrade
group are features whose benefits are very
hard to quantify, like occupant health related
to improved interior environmental quality (air
quality, daylighting, nature views), the impact
of using sustainable materials or benefits that
flow outside the property line (i.e. social/political
benefits, stormwater control). This last group
contains large potential wins and progress is
being made to quantify them. Research on
healthful design shows huge worker health and
productivity impacts, helped by certifications like
Well Building Standard 2 or Passive House. 3 But
proving the specific dollar impact flowing to the
building (not business) and long term durability
is complex. One option I have used is to settle
on a "not less than" value (like 50% discount of
expected savings) that can hit a reliability and
ease-of-execution sweet spot banks can
get behind.

POSTING THE APPRAISAL
ASSIGNMENT FOR BID
After the loan application has been accepted,
the next step is engaging the appraiser. Typically,
an online RFP about the property is posted to
the bank's approved appraiser list. Because the
RFP postings are often done by loan processor
staff, specific property details may be omitted.
Far too often appraisal assignment postings do
not include references to HP building features,
which, when discovered later, can trigger a host
of bid revisions, alternative appraiser selection
and delays.

THE BANKER, INITIAL LOAN APPLICATION
At the initial loan meeting the owner should
deliver a hard copy document pack to the
banker, and follow up with digital versions.
Digital documents allow easy delivery to those
along the mortgage chain. Specifically, the
owner should ask the banker (in person and
repeat via email) to include the most vital HP
property information when posting for bids to
select a qualified appraiser. Banker comments
such as, "The appraiser will take care of
gathering that information later" are a recipe
for disaster as the appraiser bids received and
appraiser selection will be based on incomplete
property knowledge.

SUBJECT PROPERTY INSPECTION
The owner (or his knowledgeable
representative) should plan to accompany the
appraiser during the inspection, at least at
locations where HP features are at the property.
Check that the appraiser has the entire property
document pack. Don't assume that all the
infotrmation you supplied to the banker was
forwarded to the appraiser. Get the appraiser's
business card to email the info package as digital
files to be on the safe side.

APPRAISER SELECTION
After the RFP closes, the bank selects the
"best" appraiser from the submitted bids.
Ideally, this involves weighing fee, timing and
ability rather than just going to the lowest cost
option "to save the borrower money." This entire
process of posting the RFP, appraiser replies
and appraiser selection, is a rapid-fire affair.
An owner should emphasize to the banker at
an early stage that they are happy to pay extra
and allow more time (typically a 10%-15% fee
premium and an extra few days to a week) to
obtain a competent valuation from an appraiser
experienced with HP features.
APPRAISER CONTACT WITH OWNER
When the appraiser contacts the owner for
the property inspection, the owner should
immediately confirm that the appraiser was
aware of the property's HP features at the time
of the bid and can competently consider the HP
features in the value. If the appraiser is unaware
of the performance upgrades or is lacking the
skills, the owner should immediately go back to
the bank and insist on a new, qualified appraiser.
A revised appraisal fee and slight delay may
result, but it is far better to start over now,
rather than trying to resolve later in the process.

THE REVIEW APPRAISER
Once delivered, all appraisals are read by a
second pair of eyes during the appraisal review.
NESEA.ORG * 23


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Table of Contents for the Digital Edition of BUILDING ENERGY - Spring 2018

From the Executive Director
From the Board Chair
Product Choices for High-Performing Building: Materials Matter
Designing Solar for High-Density Areas
High Performance Building Valuation Techniques
Starting with the End in Mind: Enhanced Turnover for Efficient Building Operations
Behavior Based Strategies and Organizational Change in Commercial & Public Buildings: The Human Component of Energy Efficiency
Commercial HVAC Retrofits That Work
Stretch Codes Emerge as a High Impact Strategy For Energy Savings
Scale it Up: Monitoring-Based Demand-Side Operations for NYC Agencies
The Retrofit Revolution
Index to Advertisers
BUILDING ENERGY - Spring 2018 - intro
BUILDING ENERGY - Spring 2018 - cover1
BUILDING ENERGY - Spring 2018 - cover2
BUILDING ENERGY - Spring 2018 - 3
BUILDING ENERGY - Spring 2018 - 4
BUILDING ENERGY - Spring 2018 - 5
BUILDING ENERGY - Spring 2018 - From the Executive Director
BUILDING ENERGY - Spring 2018 - 7
BUILDING ENERGY - Spring 2018 - 8
BUILDING ENERGY - Spring 2018 - 9
BUILDING ENERGY - Spring 2018 - From the Board Chair
BUILDING ENERGY - Spring 2018 - 11
BUILDING ENERGY - Spring 2018 - Product Choices for High-Performing Building: Materials Matter
BUILDING ENERGY - Spring 2018 - 13
BUILDING ENERGY - Spring 2018 - 14
BUILDING ENERGY - Spring 2018 - 15
BUILDING ENERGY - Spring 2018 - 16
BUILDING ENERGY - Spring 2018 - 17
BUILDING ENERGY - Spring 2018 - Designing Solar for High-Density Areas
BUILDING ENERGY - Spring 2018 - 19
BUILDING ENERGY - Spring 2018 - 20
BUILDING ENERGY - Spring 2018 - 21
BUILDING ENERGY - Spring 2018 - High Performance Building Valuation Techniques
BUILDING ENERGY - Spring 2018 - 23
BUILDING ENERGY - Spring 2018 - 24
BUILDING ENERGY - Spring 2018 - 25
BUILDING ENERGY - Spring 2018 - Starting with the End in Mind: Enhanced Turnover for Efficient Building Operations
BUILDING ENERGY - Spring 2018 - 27
BUILDING ENERGY - Spring 2018 - 28
BUILDING ENERGY - Spring 2018 - 29
BUILDING ENERGY - Spring 2018 - 30
BUILDING ENERGY - Spring 2018 - Behavior Based Strategies and Organizational Change in Commercial & Public Buildings: The Human Component of Energy Efficiency
BUILDING ENERGY - Spring 2018 - 32
BUILDING ENERGY - Spring 2018 - 33
BUILDING ENERGY - Spring 2018 - 34
BUILDING ENERGY - Spring 2018 - 35
BUILDING ENERGY - Spring 2018 - Commercial HVAC Retrofits That Work
BUILDING ENERGY - Spring 2018 - 37
BUILDING ENERGY - Spring 2018 - 38
BUILDING ENERGY - Spring 2018 - 39
BUILDING ENERGY - Spring 2018 - 40
BUILDING ENERGY - Spring 2018 - Stretch Codes Emerge as a High Impact Strategy For Energy Savings
BUILDING ENERGY - Spring 2018 - 42
BUILDING ENERGY - Spring 2018 - 43
BUILDING ENERGY - Spring 2018 - 44
BUILDING ENERGY - Spring 2018 - Scale it Up: Monitoring-Based Demand-Side Operations for NYC Agencies
BUILDING ENERGY - Spring 2018 - 46
BUILDING ENERGY - Spring 2018 - 47
BUILDING ENERGY - Spring 2018 - 48
BUILDING ENERGY - Spring 2018 - 49
BUILDING ENERGY - Spring 2018 - 50
BUILDING ENERGY - Spring 2018 - The Retrofit Revolution
BUILDING ENERGY - Spring 2018 - insert1
BUILDING ENERGY - Spring 2018 - insert2
BUILDING ENERGY - Spring 2018 - 52
BUILDING ENERGY - Spring 2018 - 53
BUILDING ENERGY - Spring 2018 - 54
BUILDING ENERGY - Spring 2018 - 55
BUILDING ENERGY - Spring 2018 - 56
BUILDING ENERGY - Spring 2018 - 57
BUILDING ENERGY - Spring 2018 - 58
BUILDING ENERGY - Spring 2018 - 59
BUILDING ENERGY - Spring 2018 - Index to Advertisers
BUILDING ENERGY - Spring 2018 - 61
BUILDING ENERGY - Spring 2018 - 62
BUILDING ENERGY - Spring 2018 - cover3
BUILDING ENERGY - Spring 2018 - cover4
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