Land Use & Zoning
A 'living' or 'green' building certification (such as LEED) typically affects real estate value by:
ADecreasing value due to higher construction costs
BOften increasing value and marketability due to lower operating costs and tenant preference for sustainable space✓ Correct
CHaving no effect on market value
DReducing property taxes
Explanation
Green building certifications (LEED, ENERGY STAR, Green Globes) are associated with lower operating costs (energy, water), healthier indoor environments, and growing tenant/buyer preference for sustainable properties, often commanding premium pricing.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
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