Director of Originations at PACE Equity, Andrew Freter, was recently featured in Commercial Property Executive’s “2026 Green Building Outlook: From Policy to Proof.” As many municipalities move from the implementation of Building Performance Standards (BPS) to the active enforcement, the commercial real estate sector is actualizing better buildings. Many experts view 2026 as the beginning of the “proof phase,” where sustainability success is defined not by intention but by results.
Real estate developers and investors recognize the need to meet BPS requirements (in specific municipalities), while continuing to develop profitable real estate solutions. A financing tool that meets the demand for low-cost, flexible capital (while also fitting well with BPS renovations), C-PACE financing has evolved from an “add-on” to an integral layer of the capital stack. Why? Deal structures can be customized to deliver amortization and interest-only periods tied to construction milestones instead of one-size-fits-all terms. Most projects still require senior-lender consent, but PACE Equity reports a growing number of deals where it served as the primary (sole) lender, eliminating consent needs altogether.
Demand is deepening across markets and asset types. PACE Equity expects continued growth in New York, Dallas, Chicago, and Los Angeles, with further expansion throughout the Sun Belt and Midwest, as well as strong momentum in hospitality and multifamily as banks maintain their conservative leverage points. The 2025–2027 maturity wall is another tailwind: recapitalizations to replenish interest reserves, manage cost overruns or extend amortization were robust in 2025 and are likely to remain strong through 2026.
“C-PACE is a flexible source of capital—from new development to retrofits—and wider understanding of that is what accelerates 2026,” said Freter.