Energy Factors in Commercial Mortgages: Gaps and Opportunities
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- Univ. of California, Berkeley, CA (United States)
- Inst. for Market Transformation, Washington, DC (United States)
The commercial real estate mortgage market is enormous, with almost half a trillion dollars in deals originated in 2015. Relative to other energy efficiency financing mechanisms, very little attention has been paid to the potential of commercial mortgages as a channel for promoting energy efficiency investments. The valuation and underwriting elements of the business are largely driven by the “net operating income” (NOI) metric – essentially, rents minus expenses. While NOI ostensibly includes all expenses, energy factors are in several ways given short shrift in the underwriting process. This is particularly interesting when juxtaposed upon a not insignificant body of research revealing that there are in fact tangible benefits (such as higher valuations and lower vacancy and default rates) for energy-efficient and “green” commercial buildings. This scoping report characterizes the current status and potential interventions to promote greater inclusion of energy factors in the commercial mortgage process.
- Research Organization:
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- Sponsoring Organization:
- USDOE
- OSTI ID:
- 1342937
- Report Number(s):
- LBNL-1006378; ir:1006378
- Country of Publication:
- United States
- Language:
- English
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