California C-PACE: A Guide to Financing
Benefits of C-PACE
Long-term financing for energy efficiency, renewable generation, alternative energy, water use, seismic strengthening, and wildfire improvements to commercial and multifamily properties with repayment through a property tax assessment.
- Low-cost, non-recourse, non-accelerating capital
- 100% project financing includes hard, soft and related costs
- Serves as a critical component of the commercial real estate capital stack for new construction and property rehabilitation/repositioning
- Payments may be deferred for several years or structured with an interest-only period
- Facilitates corporate sustainability goals and compliance with mandated capital improvements
How C-PACE works
C-PACE programs are public-private partnerships that foster the adoption of energy efficiency, renewable energy and resiliency improvements by commercial properties by helping ‘green’ and resilient infrastructure investments make economic sense.
- property owners gain access to private capital to reduce operational expenses and manage their capital stack effectively
- communities are able to provide an incentive for carbon reduction, public safety, and economic development at zero cost to taxpayers
- building tenants and occupants can benefit from reduced utility costs, increased building performance, and operational resiliency
- state and local legislators can address specific social objectives such as carbon emission reduction goals and earthquake preparedddness
Case Example
Tommie Hollywood, a Hyatt brand hotel, located between Sunset and Hollywood Boulevards in Los Angeles opened in 2021. During development, the owners sought to lower the overall cost of capital for this 212 guest room boutique hotel, making C-PACE an optimal financial tool to support the sustainable and resiliency aspects of their build.
“Working with Counterpointe Sustainable Real Estate to help build sustainability into our projects has become an important part of our capital strategy,”
– Warren Cruz, Chief Accounting Officer, Relevant Group
- $12 million 30Yr fixed rate C-PACE financing
- New development in Hollywood, CA
- Energy Efficiency and seismic resiliency
- Construction completed 2021
Operational Efficiency
with C-PACE
$12 million C-PACE financing
C-PACE program details
PACE Eligible Improvements
From roofing and building envelope to HVAC and lighting on the efficiency side to renewable energy, water conservation and resiliency to storm, flood and seismic events, PACE financing covers endless improvements to new and existing properties.
Retroactive PACE
PACE financing can be applied to completed projects to recapitalize energy efficiency, renewable and resiliency investments. Refinance is important in newer PACE markets where the legislation may follow an owner’s investment and is a strategic resource for owners.
PACE for Green Roofs
Using PACE financing for a Green roof can yield a cash flow positive improvement that adds value by increasing energy efficiency, reducing storm-water run-off and transforming unused space into a building amenity to be enjoyed by tenants.
Specialty Resilience Program
City of San Francisco Seismic PACE Retrofit Program
F.A.Q.
PACE is an acronym that bears some explaining. In fact, it’s a little misleading because it’s not just for “clean energy.” Some answers to common questions are provided here, but ask your own by clicking below.
What can I do if PACE is not available for my ownership structure or property type?
CounterpointeSRE is focused on the finance of sustainable real estate, so when PACE is not available, we will explore activating the region for you with local administrators while simultaneously offering additional finance options such as EEAS or ESAs and PPAs.
How much PACE financing can my property support?
Financing parameters generally allow for a lien to value of up to 35% for a retrofit and 20% for new construction based on the as-is or stabilized property value. Of course, this varies by property type and location. Get a quote today or ask a question to evaluate your options with a financing expert.
What are the financing terms and rates for C-PACE financing?
The length of the loan or assessment is generally based on the average useful life of the equipment to be installed and can vary from 5 to 30 years. The loan is fully amortizing, with no guarantees of covenants required. Interest rates are fixed and vary by location, term, project size and property type please “get a quote” for current rates.