SAN FRANCISCO--()--The need to finance energy-efficiency improvements to existing commercial and multifamily buildings throughout California has become a priority for the state’s public utilities commission. To meet that state priority, leaders in real estate, energy, finance, technology and government participated in a forum, “Where Is the Money? Unlocking Capital for Real Estate Energy Efficiency Improvements,” on October 5, 2012, at The Ritz-Carlton in San Francisco.
“California needs to find ways to achieve wide-scale improvement in the energy footprint of commercial and multifamily residential real estate”
Presented by Manatt, Phelps & Phillips, LLP; the University of California Berkeley’s Fisher Center for Real Estate & Urban Economics of the Haas School of Business; University of California, Berkeley, School of Law’s Center for Law, Business and the Economy; and the Philomathia Foundation, the invitation-only forum included a keynote address on federal policy from U.S. Senator Ron Wyden (D-Ore.), a member of the Senate Committee on Energy and Natural Resources.
The forum occurred during a unique period in which stakeholders have been invited to submit formal comments to California’s investor-owned utilities and the California Public Utilities Commission (CPUC) about ways to finance energy improvements over the next two years. The final CPUC decision, due before the end of the year, is expected to allocate nearly $200 million of ratepayer funds to a set of financing strategies for energy improvements to existing buildings in California.
“As the recovery slowly gains steam and businesses take on the challenges of the new economy, it has never been more important to minimizing energy consumption,” said Clayton Gantz, a partner with Manatt and panel moderator. “Technology to accomplish more with less is critical, but equally important are viable financing options. This is an area where government, real estate and finance are coming together to craft creative solutions and mechanisms to bring about an energy efficiency market transformation. Manatt was a proud partner with the University of California and the Philomathia Foundation, bringing this impressive group together to discuss and debate how to move the process forward.”
Currently, a number of impediments challenge the scaled deployment of capital to energy efficiency, including the need for data and underwriting techniques to include energy considerations in risk and asset management decisions, a liquid secondary market for existing and proposed energy efficiency financing products, and technology innovations to measure and benchmark energy efficiency risk.
“All real estate market constituents will benefit from improved energy efficiency,” said Nancy Wallace, professor at the Haas School of Business and co-chair of the Fisher Center for Real Estate and Urban Economics at Haas. “Developing methods to assess and manage energy risk in commercial real estate remains critical to the development of needed capital markets to achieve energy efficiency benefits. California has long been on the leading edge of these issues. The ideas that came out of this event will help guide not just our state, but also the nation on issues concerning energy efficiency financing.”
The full-day forum included panels on devising prudent and sustainable approaches to accessing capital, including ways to evaluate energy cost in asset management and portfolio risk decisions; comparing benefits of financing energy efficiency through the first-lien market with other financing innovations and methods for bringing capital to building owners; addressing the current and emerging technologies and methodologies to facilitate energy risk management and building energy assessment; and exploring developments in the nascent venture, secondary and bond markets in energy-efficient investing.
“California needs to find ways to achieve wide-scale improvement in the energy footprint of commercial and multifamily residential real estate,” said Ken Taymor, the executive director of the Berkeley Center for Law, Business and the Economy at Berkeley Law. “Building connections between the government, real estate, technology and finance industries – and intertwining the expertise and unique perspectives of each – is the first step in eliminating costly waste and employing efficient, long-lasting energy solutions.”
The 2012 Philomathia Foundation Forum, the fourth of an annual series, attracted more than 100 participants. In addition to Wyden, the program featured John Chiang, California state controller; Caroline Blakely, vice president for multifamily risk at Fannie Mae; Richard Kauffman, senior advisor to U.S. Secretary of Energy Dr. Steven Chu; and Jeanne Clinton, special advisor to the governor for energy efficiency at the California Public Utilities Commission; as well as representatives of the largest real estate and financing interests in the state.
About Manatt, Phelps & Phillips, LLP
Manatt, Phelps & Phillips, LLP, is one of the nation's leading law firms, with offices strategically located in California (Los Angeles, Orange County, Palo Alto, San Francisco and Sacramento), New York (New York City and Albany) and Washington, D.C. The firm represents a sophisticated client base – including Fortune 500, middle-market and emerging companies – across a range of practice areas and industry sectors. For more information, visit www.manatt.com.
About Haas School of Business and Fisher Center for Real Estate and Urban Economics, University of California, Berkeley
As the second-oldest business school in the United States, the Haas School of Business at the University of California Berkeley is one of the world's leading producers of new ideas and knowledge in all areas of business. Haas holds the further distinction of having two of its faculty members receive the Nobel Prize in economics. The Fisher Center for Real Estate and Urban Economics is an organized research unit within Haas. The Fisher Center is one of the first academic institutions in the United States with an exclusive focus on the study of real estate and urban land markets. It is recognized internationally as a leader in the field of real estate economics and finance. For more information, visit www.haas.berkeley.edu and www.fishercenter.berkeley.edu.
About Berkeley Center for Law, Business and the Economy, University of California, Berkeley, School of Law
The Berkeley Center for Law, Business and the Economy (BCLBE) is Berkeley Law’s hub for rigorous, relevant, empirically based research and education on the interrelationships of law, business, and the economy. BCLBE informs students, policymakers and the public of the implications of this innovative work to promote positive outcomes on business operations, economic growth, and market efficiency. BCLBE’s interdisciplinary approach to basic research, timely policy research, curriculum innovation, and public education empowers current and future leaders in business, law and policy to tackle the most pressing problems of today and tomorrow. For more information, visit www.law.berkeley.edu/bclbe.htm.
About Philomathia Foundation
The Philomathia Foundation is a private charitable organization, registered in Canada and Hong Kong, dedicated to improving the human condition through the support of innovative, forward-thinking individuals and ideas. The driving force behind the Foundation is the belief that knowledge and research should not be contained and focused within a single discipline, but rather used creatively to solve problems across disciplines and across cultures. The Foundation was formed in 2004 by the Chung brothers, who share a dedication to furthering knowledge and solving humanity’s problems through novel applications of research and technology. For more information, visit www.philomathia.org.