RICS Fellow Scott Muldavin Announces New Book on Sustainable Underwriting


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03/09/2010 11:10

Tour to Support Book and Green Building Finance Consortium Visits North America, China, Europe

SAN RAFAEL, CALIF., and NEW YORK CITY – March 9, 2010 – The Green Building Finance Consortium (GBFC) announces the release of Value Beyond Cost Savings: How to Underwrite Sustainable Properties, the first book dedicated to enabling private investors to integrate the value of sustainable property investment into their decision-making. The book was authored by Scott Muldavin, an RICS Fellow and member of the RICS Americas Sustainability Working Group.

The book and complementary resources are available on the Consortium’s web site as a free public service (http://www.greenbuildingfc.com/). A printed hard-copy book will be available for $35.00 in March 2010.

Muldavin will be promoting the book with speaking engagements in the United States, Canada, China and, later this year, Western Europe.

Rapid market change has significantly increased the demand for sustainable properties by tenants, investors and regulators, but decision-making has not evolved, limiting investment to what can be justified based on operating cost savings alone. Value Beyond Cost Savings meets this challenge, providing a roadmap for integrating value and risk into sustainable property decision-making, enabling larger and more profitable levels of investment.

While the value of health and productivity benefits, reputation enhancement, and protection against economic obsolescence have been generally understood for years, Value Beyond Cost Savings is the first book to detail how to assess “sustainable value” for specific properties. Equally important, the book addresses sustainable property failure and underperformance. Capital can now identify, price, and/or mitigate sustainable property risk — a key to improved capital flows, pricing and terms.

Muldavin is a nationally recognized real estate capital markets expert who formed the Green Building Finance Consortium in 2006 to independently assess the “value” of sustainable property investment, and create valuation and underwriting methods and practices to enable investors to make their own determinations.

Due to its unique combination of capital markets and sustainability knowledge, Value Beyond Cost Savings provides those with money the methods and practices necessary to assess the value and risk of sustainable property investment, while providing those seeking money an insider’s view on how capital providers value property and make investment decisions.

Importantly, the Consortium is financed independent of green building product or professional organizations. Members are leading real estate companies, governments, nongovernmental organizations and industry trade associations including BOMA International, the Mortgage Bankers Association, the Pension Real Estate Association, the National Association of Realtors, and the Urban Land Institute.

Book Background
Book Facts
  • Value Beyond Cost Savings: How to Underwrite Sustainable Properties is 320 pages long.
  • Value Beyond Cost Savings is supplemented by separate publication of six “Expanded Chapters,” which together provide more than 650 pages of in-depth research, analysis, and performance information.
  • The book and six “Expanded Chapters” are available for free download on the Consortium’s website (http://www.GreenBuildingFC.com).
  • A web-based Research Library complements the Consortium’s publications with thousands of documents coded using GBFC’s unique index designed for the sustainable finance and investment industry. The structure of the index is consistent with the organization of the Consortium’s foundational book: Value Beyond Cost Savings.
  • The book is focused on private commercial and multi-family property decisions.
  • Primary target audiences include commercial property owners, developers, owner occupants, tenants, lenders, brokers and appraisers.
  • Secondary audiences include governments, academics/researchers, and real estate service providers.
  • Individuals and organizations from around the world have influenced the book’s findings and conclusions significantly. Due to the book’s emphasis on methods and practices, much of the work will have applicability across national borders.
  • A Topical Index and Detailed Table of Contents are included in the book to assist readers in locating where key issues are addressed in the book and Expanded Chapters. These documents and an annotated Research Library Index can be downloaded for free from the Consortium’s website.
Book Highlights
  • Explains how to define sustainability for specific properties and, more importantly, how sustainable definitions and certifications affect value. (Page 16)
  • Presents GBFC’s Sustainable Property Performance Framework, which introduces “Market Performance,” the “missing link” in performance assessment critical to financial analysis and valuation. (Page 31)
  • Identifies sustainable property features and processes that have failed or underperformed in the past and outlines best practices to mitigate risks going forward. (Pages 34 and 48)
  • Details findings and conclusions regarding sustainable building performance for development costs, whole buildings, energy use, occupant performance, and durability/flexibility. (Page 59)
  • Documents the best sustainable market performance evidence to date in four newly created categories of market performance research: 1) expert-based financial analyses, 2) statistics/modeling-based financial analyses, 3) surveys/market research, and 4) foundational background and theory. (Page75)
  • Develops three principles to guide the application and interpretation of sustainable market performance research. (Page 77)
  • Presents a six-step process for financial analysis of sustainable properties. (Page 97-all of Chapter V)
  • Coins the term “Sustainable Sub-Financial Analysis” and identifies 10 such analysis techniques critical to supporting premium value for sustainable property investment. (Page 100)
  • Introduces GBFC’s Sustainable Property Cost-Benefit Checklist, a comprehensive 40-page assessment of the positive and negative risks of sustainability. (Page 106 and Appendix G)
  • Underscores the critical importance of RAP (Risk Analysis and Presentation) to sustainable property decision-making. (Page 131)
  • Goes beyond financial analysis and valuation to present guidelines for underwriting sustainable property decisions for both new and existing properties. (Page 146-all of Chapter VI)
  • Provides a detailed assessment of the differences in sustainable property valuation (Page 136) and Underwriting (Page 149).
  • Presents special sections on the unique challenges of underwriting service providers, space user demand, and energy efficiency investment.


About the Author
  • For more than 25 years, Scott Muldavin has advised leading real estate companies including CalPERS, RREEF, Bank of America, Mitsui Trust and Banking, Great West Life, Prudential Real Estate, Ohio State Teachers Retirement System, Wells Fargo Bank, The Government of Singapore Investment Corporation, Alaska Permanent Fund, Catellus Development Corporation, Equitable Real Estate, and Standard Insurance Company. (http://www.Muldavin.com)
  • He co-founded Guggenheim Real Estate, a $3 billion private open end real estate investment company managing investments in properties, REITs, and high yield debt.
  • Muldavin was a real estate Partner at Deloitte and Touché where he was a leader of the real estate financial institutions, valuation, and corporate real estate practices.
  • In 2006, Muldavin became Executive Director of the Green Building Finance Consortium, a group he founded to address the private sector’s need for valuation and underwriting methods and practices that would enable an assessment of sustainable properties from a financial perspective.
  • In his work with the Consortium, Muldavin collaborates with many organizations to assist in the development of data, analytic techniques, guidelines and other knowledge critical to enabling private sector investment in sustainable properties. Collaborators include the Royal Institution for Chartered Surveyors, Lawrence Berkeley National Laboratory, Rutgers Center for Green Building, Database for Sustainable and High Performance Buildings, World Business Council for Sustainable Development, Appraisal Institute and the Vancouver Valuation Accord.
  • Muldavin served as Advisory Panel member of CoreNet’s Global Energy Research Project, The California Energy Commissions HERS Advisory Committee, and on the North American Commission for Cooperation’s international Green Building Advisory Task Force.
  • Muldavin has authored over 225 articles on real estate investment, finance, securitization, valuation, and sustainability.
  • Muldavin is a Counselor of Real Estate, a Fellow of the Royal Institution of Chartered Surveyors, and a graduate of U.C. Berkeley and Harvard University.

GBFC Background
  • The Green Building Finance Consortium (GBFC) is a research and education initiative founded in 2006 by Scott Muldavin, President of The Muldavin Company, Inc. to assist private sector investors in the valuation and underwriting of sustainable property investments.
  • Muldavin and the team that have worked with him are primarily real estate finance, valuation, and investment experts who have developed deep specialization in sustainability in recent years. Muldavin co-founded a multibillion dollar private real estate fund and has completed more than 300 finance, investment, and valuation related consulting assignments.
  • Individuals in the green building industry approached Muldavin in 2006 to explore the potential for “Green” Commercial Mortgage-Backed Securities. In exploring this issue, Muldavin discovered that limited information was available on the financial or market performance of sustainable properties, that the work done was not completed by real estate experts, and sponsorship of work done was typically from organizations with a vested interest or advocacy posture towards sustainable investment.
  • The Green Building Finance Consortium was formed to help fill the void of information, methods, practices, and independence for the valuation and underwriting of sustainable properties.
  • Given the critical importance of independence, GBFC does not accept membership or financial support from green product or building trade organizations, and limits the individual investments of any organization in the Consortium’s work. GBFC does accept support from a select group of governments, non-governmental organizations, and real estate industry companies involved in energy efficiency and sustainability investment and services.
  • The Consortium has been the beneficiary of leadership at BOMA International, the Urban Land Institute, the Pension Real Estate Association, the Mortgage Bankers Association, and the National Association of Realtors, all of who are supportive Members of the Consortium. Additionally, the Royal Institution of Chartered Surveyors, the Appraisal Institute, CoreNet Global, and other trade associations have provided board members, engaged in collaborative projects, and offered other support and assistance.
  • One of the ways we have been delivering the message and content of the Consortium is through participation in important collaborative efforts addressing database development, energy research, valuation practice, and other areas critical to financial assessment of sustainable properties. Some of these collaborations include:
    • Lawrence Berkeley National Laboratory—energy and health issues
    • CoreNet Global—energy issues
    • Royal Institution of Chartered Surveyors—valuation issues
    • Appraisal Institute—valuation issues, training
    • National Association of Realtors—sustainability curriculum
    • Commission for Environmental Cooperation—policy, finance
    • Vancouver Valuation Accord—valuation and regulatory issues
    • Database for High Performance and Sustainable Bldgs—databases
    • Rutgers Green Building Research Center—REIT valuation research
    • Youth Leadership for a Sustainable Future—education
    • World Business Council for Sustainable Development—analytics
    • California Energy Commission—transaction disclosure documents
  • Going forward, the Consortium will concentrate on distribution of the key messages and content of Value Beyond Cost Savings: How to Underwrite Sustainable Properties. Key educational activities will include assisting in the development of targeted curriculum; speaking and teaching; working with organizations in targeted countries and industry sectors to distribute the book and its key messages; and refinement of key messages and content in new special reports. Scott Muldavin will also continue to guide students from around the world seeking assistance with school projects, Master theses, and PhD’s.
  • The Consortium will also continue to participate with governments, trade groups, universities, companies, task forces, and other collaborative efforts working to overcome obstacles to better sustainable property/energy efficiency investment decision-making. Specific efforts to assist in the design and implementation of financial vehicles and products will be a particular focus.
  • The Consortium has also initiated a capital campaign in early 2010 to provide funding support for its activities. Finally, the Consortium will be undertaking selective speaking engagements, advisory positions, and consulting assignments through The Muldavin Company with companies, governments, and other organizations to promote its mission and financial solvency.

About the GBFC
The Green Building Finance Consortium (GBFC) is a research and education initiative founded in 2006 by Scott Muldavin, President of The Muldavin Company, Inc. to assist private sector investors underwrite sustainable property investments from a financial perspective.

About RICS & RICS Americas
RICS (Royal Institution of Chartered Surveyors), with headquarters in London, is the leading organization of its kind in the world for more than 100,000 professionals in property, land, construction and related environmental issues.

RICS Americas, based in New York and covering North, Central and South America and the Caribbean, has more than 2,000 members in commercial and residential development, construction and project management, brokerage, planning and finance, valuation and fine arts appraisal. For further information visit www.ricsamericas.org or e-mail ricsamericas@rics.org.