A seismic risk assessment is often performed on behalf of a buyer of
commercial buildings in seismically active regions. One outcome of the assessment is that a probable maximum loss (PML) is computed. PML is of
limited use to real-estate investors as it has no place in a standard financial
analysis and reflects too long a planning period. We introduce an alternative
to PML called probable frequent loss (PFL), defined as the mean loss resulting from shaking with 10% exceedance probability in 5 years. PFL is approximately related to expected annualized loss (EAL) through a site economic hazard coefficient (H) introduced here. PFL and EAL offer three
advantages over PML: (1) meaningful planning period; (2) applicability in financial analysis (making seismic risk a potential market force); and (3) can
be estimated using a single linear structural analysis, via a simplified method
called linear assembly-based vulnerability (LABV) that is presented in this
work. We also present a simple decision-analysis framework for real-estate
investments in seismic regions, accounting for risk aversion. We show that
market risk overwhelms uncertainty in seismic risk, allowing one to consider
only expected consequences in seismic risk. We illustrate using 15 buildings,
including a 7-story nonductile reinforced-concrete moment-frame building in
Van Nuys, California, and 14 buildings from the CUREE-Caltech Woodframe Project
