From new construction to gut rehab, Commercial Property Assessed Clean Energy (C-PACE) is a new financing mechanism designed to fund capital-intensive efficiency improvements for privately-owned commercial real estate. Growing in popularity across the US, C-PACE funding has helped create energy savings and a focus on sustainability and growth.
C-PACE enables property owners and developers to obtain low-cost, long-term financing for energy efficiency, water efficiency, renewable energy and resiliency retrofits. Property owners undergoing retrofits to existing facilities will realize numerous benefits from the utilization of C-PACE financing.
How it Works
Like many public finance mechanisms, C-PACE financing is repaid via a special tax assessment on the property’s tax bill. C-PACE assessments, however, are 100% privately funded – no public or taxpayer money is involved.
Petros obtains written consent from all lenders with a secured interest in the property due to indebtedness. Mortgage lenders’ acknowledgment and consent will include a description of the C-PACE financing and a certification from the mortgage lender that the financing does not create an event of default under the terms of the mortgage.
C-PACE Benefits for Retrofits
C-PACE builds value by enabling the implementation for sustainable upgrades and does so while positively impacting a property’s bottom line. Funding a retrofit project with C-PACE financing can lower the total cost of capital and generate a faster time to positive cash flow compared to utilizing a conventional loan or by self-funding. In turn, the energy savings boosts net operating income (NOI) and increases the value of the property for building owners.
C-PACE financing also means:
- No upfront costs
- Financing is non-recourse, non-accelerating
- Transferable payment obligation
- Immediately cash flow positive
- Solves split incentive lease structures
- Increases property value
- Reduces operating expenses
For more details on these benefits, see below or contact us today for more information regarding how we can help finance your retrofits.
Other Benefits of C-PACE for Retrofits
- PACE provides 100%, long term financing of hard and soft costs with no out of pocket expenses
- Frees up operating and capital budgets
- Cash flow positive from day one
- Interest rate and payments are fixed over 10-30-year terms and under no circumstances, even default or bankruptcy, can they accelerate
- PACE liens attached to the property and “run with the land,” automatically transferring from one owner to the next so the building owner only “pays for what they use”
- Underwriting based primarily on the property, no personal guarantees
- Owner keeps any tax credits and/or rebates as a result of the project