Scott Muldavin is executive director of the Green Building Finance Consortium.
Muldavin believes that green and energy efficiency upgrades to buildings may also benefit from a concern that investors have about the risk of functional obsolescence.
Building Functional Obsolescence
Real estate investors in this country are already developing acquisition screens for any existing building that they might buy. They want to know the potential functional obsolescence in a building--the way that you can make it energy efficient or sustainable.
Cost to Cure
The key issue is an appraisal term-- the cost to cure. Investors don't want to buy a building today that the cost to cure the obsolescence, which would be lack of energy efficiency or sustainability, is so high that it doesn't make any sense.
Functional obsolescence can lead to economic obsolescence because in the future you might have tenants, regulators, and investors that don't want that building.
RESOURCE: Green Building Finance Consortium
Muldavin believes that green and energy efficiency upgrades to buildings may also benefit from a concern that investors have about the risk of functional obsolescence.
Building Functional Obsolescence
Real estate investors in this country are already developing acquisition screens for any existing building that they might buy. They want to know the potential functional obsolescence in a building--the way that you can make it energy efficient or sustainable.
Cost to Cure
The key issue is an appraisal term-- the cost to cure. Investors don't want to buy a building today that the cost to cure the obsolescence, which would be lack of energy efficiency or sustainability, is so high that it doesn't make any sense.
Functional obsolescence can lead to economic obsolescence because in the future you might have tenants, regulators, and investors that don't want that building.
RESOURCE: Green Building Finance Consortium