For the purposes of this Guide, the financial professionals sector includes those responsible for the evaluation, transactions, and financing of real estate, including investors, realtors, appraisers, and lenders.
Integrated projects have much to gain by including parties from the financial sector in early alignment workshops. If implemented more often, involving financiers in integrated design and delivery might drive new financing models tailored to the approach’s higher upfront costs and lower embedded risk. The role of financial professionals in an integrated approach is to learn about the new business models in order to understand the risk and reward structures. Being included in the design stage also gives financial professionals a broad understanding of a specific project’s green design features and potential savings from operations costs.
Including financial professions early in the process is a benefit. They:
For the financial industry, integrated design and delivery projects may appear risky, but there are some compelling reasons why financial professionals should be paying attention to integrated design and delivery projects. If projects implement the collaborative risk and reward structures into their contracts, the chance of litigation is greatly reduced. Based on available case studies, projects that follow the process are more likely successfully to come in on schedule and under budget (Ashcraft 2013) and achieve a green, high-performance building, which, in appraisals and loans, is increasingly recognized as a value. However, these opportunities will only be translated into the finance world if financial professionals can attest to these outcomes from direct experience.
The finance people need to be brought into the story so that they begin to understand why this [integrated design and delivery] is a good investment. – Chrissa Pagitsas, Fannie Mae Multifamily
New is usually risky, right? Not in this case:
Most likely, a project team will approach financial professionals because of the benefits that the owner has to gain. Benefits include receiving better terms, based on a fuller understanding of how design decisions are expected to affect operational savings; and improved financial decision-making, by better integrating sustainability factors at each step of financing. Even if involved on the periphery of the project, financial professionals will take away just as much from the alignment process as those in the project team.
Get involved! Sell your expertise:
Mastering the terms and language of integrated design and delivery is essential, especially because integrated finance” has different meanings from “integrated design and delivery.” A glossary is included in this report, and case studies offer a view into how these ideas are applied. It is important to understand that project teams also need time to adjust to an integrated design and delivery approach. Case studies show that after successfully completing a first integrated project, a team will become successively much more efficient and skilled at delivering high-performance projects cost-effectively (case study: Lion’s Gate Wastewater Treatment Plant). For this reason, outcomes may vary from project to project at first, but as teams become more experienced and the approach is more widely adopted, real estate professionals may see a noticeable difference between projects that took an integrated approach and those that did not.
Key Points for financial professionals considering integrated construction projects:
