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The race to C-PACE - a solution to recapitalize commercial real estate projects

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While there has been some recent encouraging news, disruption in the commercial real estate industry persists as bank loans mature within a tight credit market. In the current lending environment, many owners and developers are seeking financing solutions for their ongoing or recently completed construction projects. C-PACE (Commercial Property Assessed Clean Energy) is continuing to emerge as an attractive debt solution, providing one of the least expensive forms of capital available.

Savvy property owners and developers are also discovering that, in addition to C-PACE’s myriad of benefits to finance planned new construction and retrofit projects, it can also be used to recapitalize projects that are mid construction or have recently been completed (up to three years in most states).

What is C-PACE?

C-PACE (Commercial Property Assessed Clean Energy) is a public-private commercial real estate financing mechanism that provides commercial property owners and developers access to low-cost, long-term, fixed-rate financing for measures that impact the energy and water performance or resiliency of a commercial property. The program is enabled by a state level statute that classifies clean energy upgrades as a public benefit – the same way in which other public benefits, such as new roads, streetlights and water mains are paid – allowing these measures to be financed with  no money down and then repaid as a benefit assessment on the property tax bill. C-PACE funds 100% of the hard and soft costs of eligible measures, which  are also eligible to be refinanced through C-PACE – mid-flight, as well as post-completion. In the current capital constrained market, this can serve as a lifeline for property owners and developers.

How does C-PACE for recapitalization work?

Owners and developers can deploy C-PACE capital to refinance mid-construction, or up to three years post-completion in many states – allowing for flexible recapitalization to bridge projects to stabilization. The generous look-back period (up to three years) is particularly attractive for property owners that have faced challenges during the construction or the lease up of their properties – as they can recapitalize using C-PACE proceeds to pay down or restructure existing debt, fund construction cost overruns, and replenish their operating reserves. C-PACE also offers borrowers the option to delay repayments – up to 24 months post-closing.

For these reasons, as well as others highlighted below, C-PACE has been used for recapitalization extensively in recent years – in particular, helping to bridge hotel and senior living projects to stabilization following COVID – ensuring projects reach the finish line.

English Meadows – Virginia

The first C-PACE transaction under the Virginia statewide C-PACE program

Nuveen Green Capital provided Aksoylu Properties with $8.7 million in C-PACE financing for the $34.7 million project, an assisted living and memory care facility. C-PACE capital was used to fund lighting, building envelope, HVAC, plumbing, and roofing upgrades for the newly developed, 88-unit, 105-bed facility. C-PACE funds were used to establish a working capital reserve and a partial paydown of the existing senior construction loan.

Hotel Arlo – Miami, Florida
Nuveen Green Capital partnered with global real estate and investment firm Quadrum Global to provide $30 million in C-PACE funding to refinance already completed sustainability measures for the Hotel Arlo in Miami, including HVAC, lighting, water conservation and building envelope, for the 217-room luxury boutique hotel. By refinancing through C-PACE, the hotel was able to increase its operating reserves and the sponsors to recoup equity.

Other benefits of using C-PACE to recapitalize

Fixed rates
C-PACE offers a fixed rate, with a long amortization (20-30 years from first payment date)

Cost-efficient capital

C-PACE generates net proceeds of up to 35% of property value.


C-PACE financing is non-recourse, except for the completion guaranty, and there are no financial covenants, post completion.


C-PACE financing is secured via a secure property assessment, which is non-accelerating.

Prepayable at any time

C-PACE can be prepaid at any time, subject only to a declining fee.

Favorable to senior lenders 

There has been an increase in willingness for senior lenders to understand how C-PACE can be an attractive source of financing for their borrowers and accretive to their projects. It has gained widespread acceptance in the banking community, with over 500 banking institutions working alongside C-PACE lenders to date. 

When used to recapitalize, C-PACE reduces lenders’ existing exposure on projects, increases project proceeds, frees up liquidity, and decreases the average weighted cost of capital.

The expert team at Nuveen Green Capital can help.

Every step of the C-PACE process is handled by Nuveen Green Capital’s team of experts.

C-PACE is proving to be an attractive solution - not only for new projects and retrofits, but also for recapitalization. Contact us to get started on your (recapitalization) project.

To learn how C-PACE is revolutionizing commercial real estate financing, visit:

Contact us
Darien, CT
19 Old Kings Highway South, Suite 210, Darien, CT 06820
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