Commercial PACE Financing (C-PACE) is an equity stack financing tool that pays for energy and water related conservation measures (ECMs) in a ground up or building improvement construction project. It’s growing significantly and is embraced by much of the commercial real estate property owner community.

C-PACE is:

  • Long Term (Up to 20 Yrs. in MO; 22 in KS; 25 in AR, NE, OK)
  • Fixed, Competitive Rates
  • Non Recourse
  • Secured by Special Assessments on the Property that can be Passed Along to Tenants and Hotel Guests
  • Amortized Over the Term of the PACE Loan
  • Funded by Private, Institutional Capital

Effective Cost of C-PACE Capital is Below Market

Passthrough of the annual PACE assessment to tenants and hotel guests significantly reduces the cost of C-PACE capital:

  • Current Cost of 20 Year C-PACE Capital: 6.25% – 7.0% (no passthrough; compare with investor equity hurdle rates of 12% to 20%)
  • 25% Passthrough Effective Rate:                Approximately 3.5%
  • 50% Passthrough Effective Rate:                0%
  • Insulation
  • Caulking, Weatherstripping and Air Sealing
  • Water Heating Systems
  • Daylighting Systems
  • Energy Recovery Systems
  • Other Renewable Energy Resources Such As Geothermal, Cogeneration and Trigeneration

Other C-PACE Features

C-PACE Project types include:

  • Ground up construction
  • Redevelopment:
    -Renovations
    -Retrofits
    -Conversions
    -Rehabs
  • Owner Occupied Building Projects
  • Nonprofit-owned Building Projects

C-PACE can fund 100% of the Energy Efficiency and Water Conservation related improvements (hard and soft costs) of a project, up to a maximum of 20% to 30% of the property “Value at Completion”.

PACE loans will include capitalized interest through the construction period. The first PACE assessment is not due until the project is completed and in or after the stabilization period.

C-PACE funding from $300,000 to $20M+ for any single project.

C-PACE application to funding is relatively quick; 45 to 90 days in most cases.