Fisher Center Co-Hosts Forum on Energy Efficiency Financing

The Haas School's Fisher Center for Real Estate & Urban Economics co-hosted a forum Friday in San Francisco focused on securing capital to fund a transformation in energy efficiency in commercial and multifamily residential buildings throughout California and beyond.

The invitation-only, full-day forum, titled "Where Is the Money? Unlocking Capital for Real Estate Energy Efficiency Improvements,” attracted more than 100 leaders from the real estate, energy, finance, technology and government sectors. U.S. Sen. Ron Wyden, D-Ore., a member of the Senate Committee on Energy and Natural Resources and the Senate Finance Committee, gave a keynote address on federal policy.

In addition to Wyden, the program featured California State Controller John Chiang; Caroline Blakely, vice president for multifamily risk at Fannie Mae; Richard Kaufman, senior adviser to U.S. Secretary of Energy Steven Chu; and Jeanne Clinton, Special Advisor to the Governor, California Public Utilities Commission.

"The forum was convened to discuss a possible roadmap for the development of needed capital markets to support energy-efficiency improvements in commercial and multifamily real estate,” says Professor Nancy Wallace, Lisle and Roslyn Payne Chair in Real Estate and Capital Markets and co-chair of the Fisher Center for Real Estate and Urban Economics at Haas. “The dialogue was frank and provided an opportunity for leaders in technology, banking, the real estate industry, and public policy to debate the merits of numerous new public and private sector initiatives to jump-start these capital markets,”

The meeting was organized into four sessions: origination markets for energy-efficient commercial real estate loans; new metric technologies for evaluating the energy efficiency of commercial real estate; strategies to develop securitized bond markets to support an energy-efficiency loan market; and California and federal policy initiatives. The discussion was led by a panel of specialists for each topic and included significant audience participation by industry leaders.

Haas Professors Wallace, Dwight Jaffee and Richard Stanton recently completed a large Department of Energy funded research project that was carried out jointly with researchers from the Lawrence Berkeley National Laboratory and UC Berkeley’s Department of Civil Engineering. The purpose of this research was to develop new loan-underwriting techniques to evaluate and price the energy-efficiency risk of commercial real estate buildings. The authors found that not accounting for energy price and consumption risk leads to significant expected mispricing of commercial mortgage default risk.    

The forum was co-hosted by the UC Berkeley School of Law's Center for Law, Business and the Economy; the law firm Manatt, Phelps & Phillips; and the Philomathia Foundation, a private charitable organization that supports innovative, forward-thinking individuals and ideas to improve the human condition.