[6 min 21 sec] – A real estate investor owns a big office-building complex and decides he needs $10 million to invest in energy-efficient improvements. He goes to the bank, where the loan officer says, “Sorry, we don’t do that kind of thing.”

When it comes to underwriting commercial real-estate loans, energy efficiency hasn’t been a part of the conversation – but it should be, according to a new study, Energy Efficiency and Commercial-Mortgage Valuation, by Nancy Wallace, Dwight Jaffee, and Richard Stanton, professors at UC Berkeley’s Haas School of Business.

Backed by funding from the U.S. Department of Energy, the ongoing study develops loan models that would allow lenders to incorporate an office building’s projected energy costs into underwriting practices and commercial mortgage terms.