C-PACE is a publicly enabled and privately funded capital source that incentivizes forward-thinking, sustainable building designs and upgrades without the utilization or abatement of tax dollars. C-PACE funding can flow into a project at varying times, including after obtaining a certificate of occupancy. C-PACE provides an alternative source of permanent takeout capital to retroactively finance C-PACE eligible building upgrades.
How it Works
C-PACE financing from Petros can be used retroactively for retrofits and development projects, folding into the capital stack along with other alternative sources like HTC, TIF, NMTC, etc. to boost project returns.
Some features of C-PACE financing include:
- Fixed-rate permanent financing
- Includes project hard and soft costs
- 20 to 25-year amortization
- Non-accelerating under any circumstances
- Non-recourse to owners
- Priced to spread over average life treasury
- Fully funds at closing
- No ongoing financial covenants
Think of C-PACE as a tool for retroactively financing your commercial property’s efficiency upgrades.
C-PACE Benefits for Refinance
C-PACE finances a long list of energy and water-focused expense items that typically involve a building’s mechanical, electrical, and plumbing systems along with the building envelope (ex. HVAC, chillers, boilers, roofing, lighting, solar, controls, windows, plumbing, irrigation, etc.). In most cases, C-PACE eligible expenses in new construction deals exceed the Petros or program stipulated funding caps listed above and enable sustainable measures that might otherwise have been value-engineered out of a project.
C-PACE can cover updates on:
High Efficiency A/C
Lighting & Electrical
Roofing & Insulation
Other Benefits of C-PACE for Refinance
- Developers are able to secure lower cost, non-recourse capital to refinance the infrastructure upgrades, freeing up capital to deploy into other sustainable development projects
- Developers are able to secure a more efficient capital source and long-term interest rate hedge, ensuring the long-term stability of their capital stack
- Improves developer’s ability to service debt and generate free cash flow on the asset, especially when displacing higher cost mezzanine debt or construction loans
- Provides property owners with a special assessment payment mechanism whereby they may have the option to recover all or a portion of the cost of the improvements from building tenants or hotel guests
Ready to learn more about how C-PACE financing works for refinance?