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What is C-PACE?

Who is Petros PACE Finance?

Petros PACE Finance was founded in 2013 by a team with decades of experience in lending, structured finance, and developing operations for smooth transaction closings. We have significant institutional backing and a track record of getting C-PACE deals done when others can’t. Based in Austin, Texas, Petros PACE Finance is affiliated with Petros Partners, an asset management and investment firm.

C-PACE is an alternative financing mechanism, passed by state legislation, enabling owners and developers of commercial and industrial properties to receive low-cost, long-term financing for energy efficiency, water efficiency, renewable energy and resiliency projects (Eligible Upgrades). C-PACE payments are secured by the property and repaid through a voluntary assessment on the property’s tax bill.

A C-PACE assessment is a debt of property, meaning the C-PACE financing is tied to the property via its tax bill as opposed to the property owner, so the repayment obligation transfers with the property upon sale. Assessment financing is a concept that has been used for over 200 years for the repayment of municipal bonds attached to property taxes to fund projects for public good, such as fire stations, street lighting, and sewer and sidewalk improvements. The difference is that C-PACE uses the model for efficiency and sustainability projects for the benefit of individual building owners in the private sector.

Since the first statute was passed in 2010, over $2 billion in C-PACE transactions have been funded and publicly announced according to PACENation. This represents over 2,000 commercial projects that are responsible for generating over 24,000 jobs across the country.


The number of active C-PACE markets increases by the week. To date, C-PACE-enabling legislation has been passed in 38 states and the District of Columbia and C-PACE programs are now operating in 28 states plus the District of Columbia. Give us a call and we will let you know if your city participates; if not, we can work with the local C-PACE authority to help make it happen.

If your building is in need of energy efficiency, water efficiency, seismic or resiliency measures, your property is more than likely eligible. Petros PACE Finance will finance most commercial property types, including but not limited to office and industrial buildings, shopping centers, warehouses, multifamily properties, hospitality, medical facilities, schools, nonprofits etc.

Most commercial property types in need of efficiency upgrades will qualify. Eligible conservation measures (ECMs) must either reduce energy consumption or demand, produce renewable energy or conserve water. There is no prescribed list of measures but generally efficient mechanical, electrical and plumbing measures like chillers, boilers, LED lighting, building envelope, solar and low flow plumbing fixtures would qualify. Specific savings requirements will vary by project type and program.

In addition to ECM qualification, Petros will underwrite the financial merits of the project to determine qualification including, but not limited to, property value, owner’s equity, financial performance or projections of the property, loan-to-values (LTVs) percentages and debt service coverage ratios (DSCRs). Additional property evaluations will be conducted to ensure there are no existing environmental issues, involuntary liens or unpaid taxes.

Yes, in some states C-PACE can be used to finance improvements that are already installed and in operation. Petros can assist you in verifying eligibility and particular limitations that could apply in a specific market.

Because C-PACE programs are enabled by state and local legislation, program requirements vary by jurisdiction. Some states allow C-PACE financing for new construction, for example, while others do not. Savings requirements also vary by program. See map for more information.

Our goal is to maximize the amount of C-PACE funding without adding any cost or changing your design. We have deep expertise in energy engineering and can find the elements of your current plan that will qualify for C-PACE funding, identify the savings that will result, and help package those components to get approval from the C-PACE district administrators. In nearly every case, we are able to find enough energy savings from your current design to qualify for your desired amount of C-PACE funding.


Petros PACE Finance has the ability to fund projects ranging from $500,000 to $200 million or more. We can finance 100% of your C-PACE eligible project costs, including related soft costs (i.e. engineering, legal & other fees). However, individual projects are generally limited to 25% LTV when a mortgage is in place or up to 30% LTV without a mortgage.

C-PACE financing offers a more efficient means of financing sustainable property elements, via the following features:

  • C-PACE provides 100% funding for qualified ECMs and associated project soft costs
  • C-PACE is non-recourse after construction meaning that the assessment is secured by the property instead of personally by the borrower
  • C-PACE is non-accelerating so the unpaid C-PACE balance can never be called due, even upon an event of default or foreclosure
  • C-PACE terms may extend up to 30 years, yielding lower annual payments and thereby allowing the improvements to pay for themselves via savings generated over the life of the ECMs
  • C-PACE’s assessments remain with the property, alleviating the requirement for payoff upon transfer of title
  • C-PACE’s assessment mechanism provides a means for recovery of expenditures from tenants or hotel guests

Yes, since C-PACE liens share the same priority as property taxes and mortgage documents include provisions prohibiting modification of the loan, the existing mortgage lender must give consent for the placement of the C-PACE assessment. We can assist you in this process and encourage these discussions to be initiated as early as possible in the process.

In most cases, consent is likely because C-PACE projects will increase your building’s value and net operating income, thereby making it easier for the property owner to service the existing mortgage. Furthermore, only the C-PACE assessment in arrears is ever in front of the mortgage and C-PACE has no impact to a mortgage lender’s rights, remedies, ability to foreclosure, cure, etc. To date, over 190 lending institutions have consented to C-PACE projects across the country.

We have successfully navigated securing consent for our borrowers and can assist you in this process.

While C-PACE assessments have priority of payment over the mortgage lender, the magnitude of any loss to the lender is limited. When a property owner defaults on a C-PACE payment, only the overdue amount, not the entire balance, is due. This outstanding delinquent C-PACE amount has priority of payment over a mortgage loan. The C-PACE assessment does not accelerate upon delinquency or default.


  1. Energy audit is obtained;
  2. Property owner completes our financing application;
  3. Petros works with the local C-PACE authority to obtain project approval;
  4. Petros works with the borrower to obtain consent from the mortgage lender (if any); and
  5. The closing and funding of the project occurs.

Petros works with developers to determine an initial sizing estimate of the C-PACE assessment for use in determining the preliminary project capital stack. We can also assist in the process to engage engineers experienced in evaluating new construction and gut rehab projects for identification of measures and their associated savings for qualification for C-PACE.

Petros does not hinder the normal project development timeline. As long as we receive our diligence information in a timely fashion, we can move along simultaneously with the energy auditors, project engineers, etc. Once all due diligence items are complete, we expect to close on funding within 30-45 business days.

Petros PACE Finance funds each project directly at closing into an escrow account. Property owners love our direct model, there’s no waiting around for weeks to obtain bond approval. Funds are then disbursed during the construction of the project, alongside the construction lender’s funds if applicable.

Yes, so long as the contractor is a registered contractor if required by the applicable C-PACE program.

Specific requirements regarding documentation of projects savings depends on the state statute or the program administrator’s guidelines. An energy audit assesses the energy usage of systems in the building and helps the property owner evaluate which upgrades will produce the most energy savings and are the most cost effective to pursue. Generally, an ASHRAE Level II audit is provided though not always required. In many states, the contractor can prepare the initial energy savings report that may be later verified by an independent third-party reviewer. Petros requires energy, water, seismic or windstorm feasibility studies or audits as applicable on all projects.

The assessment is included on your property’s tax bill and is typically paid annually or semi-annually either directly to the county along with your ad valorem taxes or directly to Petros depending on the collection method specified by the C-PACE program.

Yes, however, a prepayment fee may apply. These terms will be detailed in our term sheet and the Assessment Agreement.

The C-PACE assessment can remain in place as it is designed to transfer seamlessly to the subsequent owner upon sale. C-PACE improvements tend to increase the value of a property through higher tenant retention rates, higher occupancy, improved infrastructure and improved cash flows. The new owner and its tenants are assuming the cost of the C-PACE loan but they will also benefit from the utility and maintenance savings generated by the project. In general, it is easier to sell a property without end-of-life concerns around building systems — projects that can be financed through C-PACE.

C-PACE assessments are always recorded, so they are easily identified in title reports. The assessment will transfer automatically and because C-PACE assessments have a flat, predetermined amortization, they can be incorporated into your mortgage lender’s T&I escrow.