Energy Factors in Commercial Mortgages

Energy Factors in Commercial Mortgages

Outline of commercial buildings on a blue circular background

Commercial mortgages currently do not fully account for energy factors in underwriting, valuation and asset management, particularly as it relates to the impact of energy costs on net operating income and default risk. As a consequence, energy efficiency is not properly valued and energy risks are not properly assessed and mitigated. Commercial mortgages are a large lever and could be a significant channel for scaling energy efficiency investments.

This project seeks to lay the foundation for developing scalable interventions to address this issue. The project is sponsored by the US Department of Energy's Building Technologies Office, and is being led by Berkeley Lab in collaboration with the University of California Berkeley's Haas School of Business. The project team is currently working on selected interventions in partnership with mortgage lenders, building owners and other stakeholders.

Flowchart: Energy/"Green" Impacts on Mortgage Valuation to Potential Intervention Points to Potential Outcomes

Fact Sheets



Do energy costs really affect commercial mortgage default risk?
New results and implications for energy efficiency investments
ACEEE Summer Study 2018 presentation  
Commercial Mortgages: Energy Factors and Default Risk
Better Buildings webinar recording and slides, September 2016
Commercial Mortgages: An underutilized channel for scaling energy efficiency investments?
ACEEE Summer Study 2016 presentation


Commercial Real Estate Mortgage Default Accounting for Utility Expenditures

Multi-family Mortgage Default Risk Associated with Energy Inefficiency
Research Paper, November 2020

The Pricing Risk of Energy Use Intensity for Office and Multifamily Mortgages
Technical Report, May 2020

Estimates of Building Component Energy Savings for Use in a Property Condition Assessment
Technical Report, updated August 2019

Impact of Energy Factors on Default Risk in Commercial Mortgages
Technical Report, updated December 2018
Impact of Energy Use and Price Variations on Default Risk in Commercial Mortgages: Case Studies
Technical Report, September 2017
Energy Factors in Commercial Mortgages: Gaps and Opportunities
Technical Report, September 2016
The project team welcomes participation from market stakeholders. For more information, please contact:
Project Lead