Commercial Property Assessed Clean Energy (C-PACE) is a state policy-enabled financing mechanism that allows building owners and developers to access the capital they need to make energy-related deferred maintenance upgrades in their existing buildings, support new construction costs, and make renewable energy accessible and cost-effective.
With Institutional Investors pressing sponsors for ESG-ready real estate, developers are realizing a sales premium of 11.5% according to JLL’s most recent Return on Sustainability report, a material difference for properties that demonstrate climate-resilient features in energy and environmental improvements. The findings concluded “From capital raising to buy/sell decisions, underwriting, financing, and resilience planning, climate change will impact every part of an asset’s life cycle; it is entering the mainstream investor dialogue more and more.”
Reduced utilities and operating expenses often outweigh the annual C-PACE interest payments.
Facilitates energy efficient & renewable energy projects which may otherwise be cost prohibitive.
Reduce equity with long term, non-recourse financing up to 100% of project costs.
Originated at a fraction of the cost of equity, preferred equity, and mezzanine debt.
As a tax special assessment, C-PACE is often recoverable from tenants or as a “green tax” to hotel guests.
C-PACE is not considered a mortgage instrument providing borrowers with a meaningful cost savings.