This post was written by Max Shafer, an editor at Innovative Building Materials.

As design and fabrication processes continue to improve with technological advancements, there is no shortage of innovative building materials to hit the market on a regular basis. While these materials offer exciting prospects for commercial building owners in terms of sustainability and energy efficiency, they can cause some issues for appraisers who have not had extensive experience assessing their long-term value. To help in this regard, the following breakdown looks at four innovative commercial building features that may prove difficult to appraise.

1. Transparent Interior Walls

Commercial buildings continue to employ the open floor plan for their interiors. Among the benefits of fewer walls and more open spaces include:

• Increased natural light flow
• Greater customizability of space
• Enhanced collaboration and connectivity among patrons

Despite the benefits of fewer interior walls, the COVID-19 pandemic reminded building owners of the importance of providing separate spaces. This has led to a rise in glass curtain wall partitions.

While these mobile, transparent walls help ensure separation while maintaining the benefits of an open floor plan, they do present some challenges for appraisers. Should they be viewed as real property or chattels? Do they provide value to all types of building tenants?

2. Modern Updates in Historic Buildings

There is a major push in the commercial building industry to reclaim and repurpose historic buildings instead of building new structures. While this process has many cost and sustainability benefits over new construction, it can be difficult to maintain the historical integrity of a building while simultaneously equipping it with the most innovative new features.

There are some companies who perform admirably in this regard, such as manufacturers of historic steel windows that can retrofit the highest quality window solutions that are nearly indistinguishable from the historic building’s classic aspect. However, this creates some challenges for the appraiser. Do the new windows add or detract from the building’s historic DNA? How can you accurately assess the longevity of a building whose components have such extreme variance in useful lifespans?

3. Radiant Floor Heating

Radiant floor heating is an innovative subfloor heating system that steadily disperses heat in an even, stove-like manner throughout the day. It can significantly reduce HVAC costs by eliminating cold pockets in a commercial building.

Despite the clear benefits of a radiant floor heating system, there are some concerns that may be difficult for appraisers to place a value on. For example, repairing the system can be a bit time consuming, leaving sections of the floor inaccessible for extended periods. Furthermore, as other aspects of the building become more energy efficient, the long-term cost benefits of having a radiant floor heating system become a bit muddled. 

4. Solar Panels and Other Green Technology

There is no denying that producing clean energy through the use of PV cells is a desirable feature in commercial buildings. Not only can creating renewable energy lower utility costs, but it can help businesses comply with government-mandated environmental standards.

The challenge when including solar panels as part of an appraisal hinges on a few factors:

• Deployment of new technology – as PV technology continues to improve and the market gets increasingly crowded, will existing solar panels become “obsolete?”
• Durability – how much investment will be required for upkeep and maintenance? Will the existing solar panels withstand severe weather or natural disaster?
• Longevity – how long before solar panels lose their ability to hold a charge?

In addition to solar panels, the same can be said for other green commercial building products that have not been subjected to years of scrutiny. Some examples include:

• PV window treatments
• Cooling bricks
• Self-healing concrete

Appraisers: what types of innovative commercial building features do you believe could prove difficult to appraise?

Max Shafer is a contributor to the Innovative Building Materials blog. He is a content writer for the construction and home improvement industries with an interest in landscaping, outdoor remodeling, and interior design. Max is focused on educating homeowners, contractors, and architects on innovative materials and methods of construction that increase property value, improve sustainability, and create a warm and welcoming ambiance.