A Guide to C-PACE Financing in Philadelphia
Benefits of C-PACE
- Non-recourse, non-accelerating capital for commercial, multifamily (coming soon) and industrial property types
- 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
- 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
Recapitalizing and Financing Tenant Improvements
Trophy office in center city Philadelphia sought to recapture deployed capital through retroactive financing with flexible financing terms to restructure the capital stack.
Landmark historic Philadelphia property
Energy upgrades with carbon offset 10,048 MT
C-PACE program details
PACE Eligible Improvements
PACE for Green Roofs
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.