The energy efficiency of a commercial building can be a predictor of CMBS loan defaults according to a new study
The energy efficiency of a commercial building can be a predictor of CMBS loan defaults according to a new study.
Research from the University of California at Berkeley and Lawrence Berkeley National Laboratory discovered that building-level energy use and price are connected to commercial mortgage default and suggests that energy efficiency should be part of the loan risk assessment for mortgage originations.
The use of, and price paid for, energy resources significantly impact the net operating income of a commercial building and the study forecasts that commercial mortgage appraisals will move towards routinely including energy efficiency and this will drive demand for the most energy efficient commercial buildings.
To determine risk of loan default, the study considered energy use per square foot and the price gap between the expected cost of electricity at the time of mortgage origination and the actual cost of electricity since.
The mortgage data analyzed was from analytics firm Trepp along with energy use statistics from benchmarking disclosures.
The research is sponsored by the US Department of Energy’s Building Technologies Office and the team is working with stakeholders including mortgage lenders and building owners.
Research from the University of California at Berkeley and Lawrence Berkeley National Laboratory discovered that building-level energy use and price are connected to commercial mortgage default and suggests that energy efficiency should be part of the loan risk assessment for mortgage originations.
The use of, and price paid for, energy resources significantly impact the net operating income of a commercial building and the study forecasts that commercial mortgage appraisals will move towards routinely including energy efficiency and this will drive demand for the most energy efficient commercial buildings.
To determine risk of loan default, the study considered energy use per square foot and the price gap between the expected cost of electricity at the time of mortgage origination and the actual cost of electricity since.
The mortgage data analyzed was from analytics firm Trepp along with energy use statistics from benchmarking disclosures.
The research is sponsored by the US Department of Energy’s Building Technologies Office and the team is working with stakeholders including mortgage lenders and building owners.
