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
- PACE is non-recourse to owners
- 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
- Energy savings generated outpace project costs plus the cost of financing (total PACE loan) from day one
- Owner keeps any tax credits and/or rebates as a result of the project
Petros Funded Retrofit Projects
1225 North Loop
”PACE introduces a new solution for building upgrades, at no additional cost to the owner. The savings energy costs will pay for the upgrades while leading the path to a greener future.”
– Seth Eslami, Stellar International
“Repair costs have increased in recent years, as the buildings’ original heating and cooling equipment has reached the end of its life. The team at Petros PACE Finance made it easy to finance new systems helping us to avoid costly repairs so we can continue preparing students for lives of service for years to come.”
– Debra Kellar, Denver Seminary