What is C-PACE Financing?
Commercial Property Assessed Clean Energy (C-PACE) is a financing solution offering fixed-rate, non-recourse private capital with up to a 30-year amortization. Available for recapitalization, retrofits, and developments, repayment is made through a non-accelerating property tax assessment on the property which is transferable upon sale or prepayable at any time.
Why Use C-PACE?
Increase IRR
- Replace expensive debt alternatives
- Add accretive leverage to overcome low LTC lending
- Lower WACC with a custom draw schedule that fits your construction schedule
- Use alongside EB5, HTC, NMTC, TIF, OZ, brownfield grants & more
FLEXIBLE STRUCTURES
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- Tailored solutions to support sponsor objectives
- Use for pre-construction, mid-construction, or post CO
- Short and long-term capital structures
- Lower cost of capital with non-recourse financing
Recapitalize
- Recapitalize recent building renovations or new construction
- Fund cost-overruns or debt payoff/paydowns
- Cover costs during lease up or build debt service reserves
- Avoid a capital call, extend or payoff maturing loan
Calculating Financing Amounts
The amount of C-PACE funding and its amortization period is determined by the equipment and other costs in the construction budget that impact energy & water use, renewable improvements, or building resiliency. Measures shown below are the most common improvements used to calculate C-PACE funding amounts.
HVAC equipment
& controls
Indoor air
quality
Seismic &
resiliency
Indoor &
outdoor lighting
Elevator/
escalator
Windows
Insulation &
envelope
Water Efficiency
& Plumbing
Roofing
Renewable Energy & Energy Storage
EV Charging
Energy Recovery
FUNDING AMOUNT AND TERM
C-PACE financing covers 100% of eligible hard and soft costs in a construction budget -- usually 30-35% for new construction and 50-100% for renovations.
Term is equal to the life of the financed equipment, typically 25 - 30 years.
C-PACE Loan Repayment
- PACE Equity Finance funds proceeds.
- After construction, sponsor pays PACE special tax assessment to municipal government once or twice a year with property taxes.
- The local C-PACE financing program is managed by a PACE Authority, which follows state-legislated guidelines.
- Municipal government remits payment to PACE Equity Finance.
Delayed Draws
Reduce the interest costs associated with capitalized interest for funds disbursed at closing. For new construction projects, PACE Equity Finance distributes C-PACE funds like a construction loan, with funds distributed according to a custom funding schedule — with rates locked for up to 2 years. Dramatically reduce your total WACC since the interest carry is no longer calculated from day 1 – but from when the funds are needed.
Where Is C-PACE Financing Available?
C-PACE financing is available when a state passes C-PACE-enabling legislation. Local municipalities then opt-in to a local program. PACE Equity Finance is a national C-PACE capital provider, lending wherever C-PACE is available. Click on the map below to explore your local C-PACE program.
Funding Available
No Funding Available
Which Asset Classes Does C-PACE Finance?
- Hospitality
- Senior Housing
- Multifamily
- Office
- Retail
- Mixed Use
- Storage
- Industrial
C-PACE Project Types
Used as a supplement to a construction loan, C-PACE completes the capital stack and improves IRR by replacing expensive debt alternatives.
C-PACE covers 100% of eligible improvements, often the entire renovation budget. It helps cover deferred maintenance costs, comply with local carbon mandates, and decrease operating expenses.
PACE Equity Finance offers substantially reduced rates for renewable energy projects (as well as energy efficient buildings) through our CIRRUS C-PACE program.
Available pre-construction, mid-construction, during lease-up, or after stabilization. Use low-cost C-PACE to improve short-term economics and long-term asset performance.
Senior Mortgage + C-PACE Solution
PACE Equity Finance offers a full capital stack solution for highly experienced sponsors – senior mortgage debt integrated with C-PACE. This combined solution adds value for both developments and recapitalizations.
Frequently Asked Questions
Are there financial incentives for energy efficient buildings?
Yes. PACE Equity Finance’s CIRRUS C-PACE program is the only financial product to offer preferential pricing for better buildings. Our CIRRUS Low Carbon and CIRRUS Zero Carbon programs provide a substantial reduction in interest rates for developments that perform better than America’s highest building codes. Renewable energy projects and green certified buildings automatically qualify for our lower CIRRUS C-PACE rates.
Does C-PACE financing require senior lender consent?
Yes. Prior to closing, existing mortgage holders on the property must consent to the C-PACE financing. This consent is not a subordination agreement or intercreditor agreement, it is simply ensuring all parties are aware of PACE Equity Finance’s participation in the project and how C-PACE financing works. Learn more.
Do I need to change my building design when I use C-PACE financing?
No. Most projects with modern building practices can qualify for some C-PACE financing without any changes to design. Exact requirements vary from state to state. PACE Equity Finance’s role is to qualify your project with our in-house engineering team. We will set a target amount based on our experience and guide you to meet the requirements. Our engineers may also provide you with suggested design changes to maximize the funding amount.
Is C-PACE government funding?
No. C-PACE financing is private capital funding. Financing decisions are made independently of any municipal entity. The local municipality will pass legislation to approve C-PACE financing and generally delegate the approval to an administrator of a special improvement district.
My project won’t have a property tax bill. Can I use C-PACE?
Yes. While C-PACE is not available for government or municipally owned buildings, non-profits and some other tax-exempt businesses can benefit from this financing. Instead of a standard property tax bill, a voluntary special tax assessment would be issued.
What happens when I sell a property with a C-PACE assessment?
C-PACE assessments “run with the land”. They are non-recourse to the borrower and may be transferred to the new property owner without any re-underwriting, assumption fees, or penalties.
Is C-PACE debt or equity?
Although our name is PACE Equity Finance, C-PACE is an assessment, underwritten as a debt service constraint. The repayment of the private capital is made through a long-term special tax assessment on the property, making it transferable upon sale.