Energy Efficiency Increases Property Value

Higher Energy Efficiency Means a Higher Property Value for You

Making energy upgrades through the Multifamily Upgrade Program will make your building more energy-efficient—and more valuable. Mounting industry evidence shows that comprehensive energy efficiency upgrades can significantly increase multifamily building property values.

How energy efficiency is increasing property value:

Investors are paying more for energy-efficient properties. More and more, energy efficiency is commanding a higher price tag. In fact, “energy upgrades can markedly raise value from the baseline ‘as is’ value, with some properties seeing increases as high as $2.5 million,” according to Genieveve Sherman, Director of Commercial and Industrial Programs for the Connecticut Green Bank. Similarly, the Houston Business Journal recently found that LEED-certified buildings command sale prices 14.4 percent higher than market average.

Consumers are associating efficiency with quality. Both tenants and investors are linking energy-efficient buildings with premium quality. According to Hines Global Sustainability Office Gary Holtzer, “sustainability is increasingly synonymous with quality and Class A status.” Additionally, “it’s becoming increasingly common for investors and tenants to value and demand sustainability and energy efficiency,” according to Todd Feist, Sustainability Manager at the Institute of Real Estate  Managment.

Appraisers are bringing energy efficiency into the equation. Energy efficiency upgrades are factoring more heavily into property value assessments than ever, and formal methodologies are being developed to quantify their added value. A recent report by the Rocky Mountain Institute and the Institute of Real Estate Management concluded that deep energy retrofits add four values beyond energy savings: increased sale price, increased rents, reduction of operating costs, and reduced development costs.