On this lender exchange call, representatives from SAHLLN’s Climate Resilience Finance Working Group shared highlights from the group’s new working paper on Identifying, Valuing, and Financing...
The commercial mortgage loan process involves high stakes and energy efficiency is generally not a motivating factor for lenders, with current mortgage practices not fully accounting for the risks and opportunities associated with energy use of buildings. After a scoping study and stakeholder engagements with lenders and building owners, Lawrence Berkeley Nat Lab and Haas School of Business identified several potential inventions to properly account for energy factors in the lending process. Here, they demonstrated how and where energy factors can "move the needle" on key underwriting metrics such as default risk, NOI, and economic or functional obsolescence.
Paul Matthew, Lawrence Berkeley National Laboratory
Nancy Wallace, Haas School of Business UC Berkeley