Top 10 reasons to use C-PACE financing to fund your commercial real estate project
C-PACE (Commercial Property Assessed Clean Energy) is a public-private funding mechanism that allows owners and developers to access fixed-rate, low-cost and long-term financing to support sustainability measures, such as solar, water savings, energy efficiency (and in some states, resiliency) on their properties.
Despite the recent market volatility, now is an opportune time to move forward (and fund sustainability measures) in CRE projects through C-PACE financing. And here are our top 10 reasons why:
It offers one of the least expensive forms of financing available.
Whether you are financing new construction, completing a retrofit project, or looking to recapitalize an ongoing or recently completed project, C-PACE’s low cost and long terms make it one of the least expensive sources of construction capital.
The rate is fixed.
The low rate is fixed and non-recourse for the entire term of the financing agreement.
And…it is long term.
The C-PACE repayment (made through the property tax bill) remains at the fixed rate through the entire useful life of the energy efficiency measures, which can be between 20-30 years!
No payment is required for up to two years.
In addition to requiring $0 down, payments can be delayed for two years.
You don’t have to take it with you.
If you sell your property, the financing agreement transfers to the new owners, with no repayment required.
It saves property owners and tenants money (a lot of money).
When you invest in C-PACE, you save money from day one by paying a lower interest rate, replacing more expensive forms of capital, and by saving money on energy bills. Often the savings covers the C-PACE payments entirely – and this savings can also be passed along to tenants.
It increases the value of your property.
Financed improvements increase the value of a property, not to mention that many tenants are seeking the comfort and amenities associated with energy-efficient buildings.
It is available in most states.
The C-PACE program is available in 30 states and Washington, D.C. through statutes that classify clean energy upgrades as a public benefit – the same way in which new roads, streetlights, and water mains are, as well. As C-PACE grows in popularity across the country, more and more states are signing on.
Property owners and developers are excited about the results.
“During the project planning phase, I learned about C-PACE and it seemed like a great fit for what we were trying to achieve through our deep energy retrofit. We expect the enhanced energy performance will transform the building for decades to come, making it a more comfortable, healthier, and productive place to do business.” –Timon Malloy, Building Owner
“We were pleased to work with Nuveen Green Capital to provide C-PACE funding to remodel such a historic site as the Oscar Mayer Station. Working in conjunction with new market tax credits, we were able to reduce the required equity, enhance our return on investment and realize significant savings in energy usage.” – Adam Reich, Co-CEO, Reich Brothers, LLC
“Nuveen Green Capital’s C-PACE construction financing was instrumental in providing cost efficient capital to fund the energy efficiency and water conservation aspects of our development project. – Andrew Glick, Principal & Founder, Rock Creek Property Group
It benefits the environment.
Given that commercial buildings are among the largest contributors to carbon emissions in the U.S., incorporating sustainability measures helps minimize their impact on the environment. With sweeping legislation being enacted at the national (the Inflation Reduction Act/IRA) and state levels, there is a much needed focus on making improvements to the way we live, work, travel, and build. The C-PACE program has been around for several years as a financing mechanism. With its origins deeply tied to the mission of reducing emissions in the built environment, there has never been a better time to employ this tool.
Nuveen Green Capital Executive team (left to right): Head of Policy and Programs, Genevieve Sherman; COO, Andrew Zech; CIO and Co-founder, Alexandra Cooley; President and CEO, Jessica Bailey at the TIAA Financial Services Headquarters at 730 Third Avenue in New York, for which NGC financed $28M in sustainability initiatives in 2021.
Photo Credit: Calderwood Photography.
Bonus Reason: You can work with industry experts at Nuveen Green Capital.
Our dedicated team offers an efficient and transparent approval process.