How can these Standards help address “Mark to Market” issues in asset underwriting?
Projects with energy and water efficient features and proven financial metrics are penalized based on underwriters applying “greater-of-market-or-actual” to expense-based items and “lesser-of-market-or-actual” to revenue-based items. Sometimes this market utility expense figure is based on appraisal comps, sometimes it’s based on a lenders experience, and sometimes it’s based on BOMA Experience and Exchange. We are attempting to make this point loud and clear and demonstrate manners within ARGUS / Excel-based modeling that these issues can come to light and be appropriately valued. Either allowing for an adjustment based on identifying these transparent asset features, and/or better defining ones market set when applying comps is the direction the industry is headed and this Standard helps get there significantly faster.
