Commercial PACE in Chicago
How C-PACE Works
The City of Chicago partners with private capital to provide long-term fixed rate financing for energy and water efficiency, renewable energy and resiliency measures to commercial and multifamily properties with semi-annual repayments.
- Non-recourse capital provided with agreement with the city and no intercreditor agreements
- Flexible terms with option to defer payment for years or include an interest-only period before self-amortization
- 100% project financing avoids CAPEX and includes design, engineering, and all and related costs
- Repayment through property taxes as OPEX may be treated off-balance sheet¹ or passed through to NNN tenants
The Chicago PACE program is administered by Counterpointe and Loop Capital to help Chicago owner reduce energy and water use as well as protect the tenants and occupants in their buildings. Counterpointe pre-screens for eligibility, orders energy report for the technical project review (TPR) along wtih other third party reports.
- Leasehold properties are eligible for financing with the fee simple owner signing transation documents
- City of Chicago requirements vary depending upon timing and size of project size. Please contact us to review project.
- Completed projects are eligible for financing
- Approval and closing process is within weeks once third party reports are received
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.
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.
C-PACE is public private partnership among private capital, government or state economic development agency to promote commercial property wind resistance and clean energy through use of the property taxes.
Since 2013, Counterpointe has provided this innovative financing as a respected leader in the foundation of the industry.
What are the financing terms?
Self-amortizing financing at fixed rates up to 35 years, term capped by life of equipment, with ability to defer start of repayment for years through capitalizing interest.
No credit impact, non-recourse with no financial covenants, intercreditor agreements, or personal guarantees.
Repayment cannot be accelerated with no due on sale clause
Competive interest rates that lower blended rate of developmer’s capital stack that vary by project and market conditions.
How much PACE financing can my property support?
Maximum net proceeds vary from 20-35% LTV (PACE lien to value) of property’s valuation once project is completed and property is producing income.
Many retrofit and gut rehab projects qualify for 100% financing, excepting FF&E. Please submit schedule of values or list of proposed measures with costs and projected savings for assistance in determining qualifying costs. Measure by measure cost benefit analysis available at no cost upon request and our underwriters are happy to work with professionals to maximize operational savings.
Removing acquisition costs, new construction typically qualifies for 25-30% LTC. Please submit schedule of values for eligibility screen and assistance.
How long is the process and what do I need to submit?
Timing varies with complexity of project and property with many financings closing 30-60 days once underwriting documents, appraisal, and other third party reports are received. Standard document requests include organizational documents for owning entity, historical or pro forma property financials, mortgage documents, rent roll, and construction documents.
Many owners elect to complete underwriting and then hold off closing for months until start of demolition or ground breaking. Closing may occur mid-construction or after completion for retroactive financing for years, with certain limitations. Please contact us for details and to discuss your project.
North Chicago Case Study of C-PACE with NMTC
Featured at Greenbuild International 2022
CounterpointeSRE recently sat down with Chicago PACE and the owners of Amped Kitchens, a multi-tenant commercial kitchen in Chicago. The 113,000-square-foot facility now features 64 kitchens for lease to food manufacturers ranging from mom-and-pop operations to large corporate brands. The owners turned to CounterpointeSRE for $4.6 million in PACE financing alongside new market tax credit funding to build out a former Zenith television factory. View the “Amped for PACE” story at right.
Video used with permission from Chicago PACE