For commercial and multifamily property owners in Washington—especially in Seattle—energy and carbon regulations are no longer a future consideration. They are actively reshaping how buildings are operated, upgraded, and ultimately valued.

Two regulations are driving this shift: the Washington State Clean Building Performance Standard (CBPS) and the Seattle Building Emissions Performance Standard (BEPS). While they are designed to work in tandem, they operate differently—and together, they introduce a level of complexity that many owners are underestimating.

Who needs to pay attention

For many owners, the first question is simple: *Does this apply to my building?*
In most cases, the answer is yes. The Washington CBPS applies to commercial and multifamily buildings starting at 20,000 square feet, with additional requirements for those over 50,000 square feet. Seattle’s BEPS follows similar size thresholds, meaning a large portion of institutional-grade assets—and even many mid-sized properties—are already within scope.

This also extends to recently completed builds or near-term delivery projects. Buildings that have not yet established a full year of utility data may not be positioned to demonstrate compliance in the initial CBPS reporting cycle beginning in 2026 and may instead fall into subsequent cycles, while buildings with sufficient operational history may be expected to comply within that first window. As a result, current code compliance alone does not ensure alignment with longer-term requirements.

The crux of these regulatory standards

At a high level, the state’s CBPS is focused on how efficiently a building uses energy, while Seattle’s BEPS goes a step further by targeting the carbon impact of that energy use. For buildings in Seattle, this means compliance is not a single track—it’s layered. Owners are expected to manage both energy performance and emissions over time, with requirements that evolve and become more stringent in the coming years.

The Washington CBPS establishes the baseline. For buildings over 50,000 square feet, owners are expected to meet defined energy use intensity (EUI) targets or demonstrate progress through energy audits and implementation of cost-effective efficiency measures. Buildings between 20,000 and 50,000 square feet follow a more process-driven path—requiring benchmarking, operational improvements, and formal energy management planning, with compliance cycles repeating every five years. In both cases, this is not a one-time exercise. It’s an ongoing commitment to measuring, improving, and documenting performance.

Seattle’s BEPS builds on that foundation and raises the stakes. It introduces greenhouse gas emissions targets that tighten over time, ultimately pushing most buildings toward net zero emissions between approximately 2041 and 2050. Initial compliance phases—beginning as early as 2027 for some buildings—focus on benchmarking verification and emissions reporting. But those early requirements are only the starting point. Future cycles will require measurable emissions reductions, often tied to significant system upgrades.

Compounded compliance—and consequences

Where this becomes particularly important is in how and where these regulations intersect. In Seattle, buildings are not choosing between the state’s CBPS and the city’s BEPS—they are subject to both. That overlap creates a compounded compliance burden, but it also creates a clear signal: piecemeal or reactive approaches will not hold up. Energy and carbon strategies need to be considered together, and they need to be aligned with broader capital planning decisions.

The consequences of waiting are not just operational—they are financial and increasingly material. Under the Washington CBPS, penalties for non-compliance can reach $5,000 per violation, with additional ongoing fines calculated on a per-square-foot basis. For smaller Tier 2 buildings, penalties are assessed at $0.30 per square foot per compliance cycle. Seattle’s BEPS carries even greater exposure, with penalties reaching up to $10 per square foot for nonresidential buildings, along with additional fines for failure to report or for inaccurate reporting. For larger assets, these numbers can escalate quickly into six- or seven-figure impacts.

But the more significant risk is not just the penalty itself—it’s how quickly timelines can compress when action is delayed. Many of the required improvements, particularly those tied to electrification or major system upgrades, require planning, capital allocation, and coordination across multiple years. Waiting often results in fewer options, higher costs, and increased disruption.

A proactive path pays off

There is, however, a more strategic path forward. Owners who engage early have the ability to evaluate their buildings holistically, identify where performance gaps exist, and align compliance with planned capital improvements. Instead of reacting to deadlines, they can phase upgrades in a way that reduces cost, minimizes disruption, and improves long-term asset performance.

The starting point is straightforward: understand how your building performs today both from an energy and emissions perspective, identify where it falls relative to upcoming requirements, and begin building a plan that integrates compliance into your broader investment strategy.

While these standards are primarily focused on existing buildings, they also have direct implications for new construction. Projects currently in design or permitting must account for evolving energy and emissions targets, as buildings delivered in the coming years will be evaluated against progressively more stringent CBPS and BEPS requirements across future compliance intervals through 2050. Aligning design decisions now with those future targets can help avoid premature retrofits and ensure long-term compliance.

Ultimately, these standards are not only setting rules—they are redefining expectations. And the difference between being ahead of them or behind them will show up not just in compliance reports, but also in how your asset performs in the market.

Staying compliant and avoiding penalties

In practice, our team at Marx Okubo has seen how quickly buildings can fall out of alignment with these requirements. On a recent engagement in Seattle, several buildings were already behind on compliance timelines, with reporting and extension deadlines either missed or closer than expected. We identified this early and are now working with the jurisdiction to clarify status and determine next steps. Given the timing, this could have exposed ownership to penalties at the upcoming reporting deadline; however, through coordination and ongoing analysis, there is a viable path to demonstrate alignment with the current EUI targets and submit compliant reporting by the deadline, avoiding penalties during the initial reporting period.

On another project in Seattle, benchmarking data had previously been submitted incorrectly, which led to the property being categorized under a more stringent compliance tier than applicable. Once corrected, the building was realigned with the appropriate classification. This correction avoided a significant escalation in compliance requirements and associated penalties. Based on the building size, this would have resulted in ongoing annual penalties on a per-square-foot basis, roughly on the order of a couple hundred thousand dollars per year. Over a few years, depending on the timing of implementing energy conservation measures, this could have added up to several hundred thousand to over $1 million in total exposure.

These issues are not unusual and highlight how important it is to have experienced technical oversight involved early in the process.

No longer an emerging issue—an expanding part of asset risk management

Washington is not alone in this shift. It is part of a growing group of U.S. jurisdictions with mandatory building performance standards, including statewide programs in Oregon, Colorado, and Maryland, alongside major city frameworks such as New York City’s Local Law 97, Denver’s Energize Denver program, and Washington, D.C.’s Building Energy Performance Standards. In each of these markets, compliance is required and noncompliance can carry meaningful financial consequences, whether through emissions-based penalties, energy performance targets, or mandated improvement pathways. Comparable requirements are also being implemented across additional cities and counties nationwide, reinforcing that building performance regulation is no longer an emerging issue, but an active and expanding component of asset risk management across U.S. real estate markets.

Marx Okubo has been actively supporting clients across several of these jurisdictions, helping navigate compliance pathways, reporting requirements, and implementation strategies aligned with each regulatory framework.

And for Washington’s CBPS and Seattle’s BEPS, Marx Okubo works with owners and investors to navigate evolving regulatory requirements, translating complex standards into clear, actionable strategies. Through benchmarking, facility condition assessments, and integrated capital planning, we help clients understand where they stand today and what steps will position their assets for long-term performance and compliance.