C-PACE: the smart way to finance commercial real estate
C-PACE stands for Commercial Property Assessed Clean Energy. It’s a program that provides attractive loans for property owners of commercial, industrial, agricultural, non-profit, and multi-family facilities in Colorado to finance energy efficiency, renewable energy generation, water conservation, and other energy improvements on existing and newly constructed properties.
C-PACE financing is low-cost, fixed-rate, long-term capital. It is repaid as an assessment on the property’s regular tax bill, and it is processed the same way other local public benefit assessments (sidewalks, sewers) have been for decades. Any measure that secures “utility cost savings” is eligible for C-PACE financing. This includes: building insulation, HVAC systems, boilers, chillers, new roofs, windows and doors, building control systems, LED lighting and daylighting upgrades, energy recovery systems, electric vehicle charging stations, on-site renewable energy systems, and water conservation measures like low-flow toilets.
For new construction, C-PACE financing can be used to replace expensive mezzanine funding in the capital stack. The maximum C-PACE finance amount will depend upon whether IECC 2015 is met or exceeded. If IECC 2015 is met, then C-PACE financing can total 15% of eligible construction costs. If IECC 2015 is exceeded by 5%, then C-PACE financing can total 20% of eligible construction costs.
Why use C-PACE financing?
C-PACE financing offers unique terms, including:
- 100% financing of project hard and soft costs, including all closing fees
- Flexible terms up to 20 years
- Fixed rate
- Available as off balance sheet
- No personal guarantees
- Can automatically pass to future building owners upon property sale
Because C-PACE is an annual tax assessment, it is considered an operating expense, which allows it to be off balance sheet and easily transferable to tenants. Lastly, C-PACE allows for building owners to make robust investments in their assets in one transaction — increasing net operating income, preserving capital, and improving asset value. We are C-PACE project developers that expertly guide building owners to finance capital expenditure through energy savings.
Contact us today at Info@BuildingEnergyPerformance.com or (720) 729-0758 learn more about C-PACE financing and whether it might be a good fit for your property.