Commercial Property Assessed Clean Energy (C-PACE) is a long-term financing vehicle for bringing your building energy and water usage to Net 0 – It’s a long-term, fixed-rate loan, NOT an incentive program. The funding is earmarked solely for energy-related improvements and water conservation projects on commercial property developments. A PACE assessment can finance up to 100% of eligible energy-related improvements, thereby limiting the up-front cash payment.

A property owner who has purchased a couple of buildings and whose properties are in the proforma stage is looking at building C-PACE into their financial stack to make some aesthetic improvements to the buildings. The proforma includes improving the building envelope in year one, then improving the mechanical and lighting systems the next year. Instead of a phased approach, the property owner should budget for all building improvements at once – building envelope, mechanical, lighting, energy, and water – with a C-PACE loan. It will allow for more improvements to be included in year one’s budget, enabling a more  complete remodel of the building, a faster opening, and less money out of pocket.

Think retail properties and tenant finish out situations can’t use C-PACE financing? Think again. A property owner with an already developed 1940s-era building in the Fort Worth Stockyards area didn’t think he could use C-PACE funds for his retail tenants’ spaces. And in this time when owners and tenants alike are strapped for cash to make building improvements, many owners have deferred rent or made other accommodations in an attempt to retain tenants, much less encourage lease renewals. The project is eligible for retroactive C-PACE financing for not only the building envelope but any energy-saving improvements made to the building by tenants. He will be able to set aside an allowance for tenant improvements during fit-out. Anything a tenant does to improve lighting, mechanical, water usage, energy usage in the space, the owner has money set aside in a financial stack already for those improvements. It’s an attractive recruiting tool for retailers to lease his spaces and retain their leases, as it lessens the amount of up-front financing needed to develop the space and make improvements. Additionally, it ensures the building is energy efficient and profitable in the long term.

A developer of a privately-owned building in a tax-improvement district just can’t seem to get the project to perform on a spreadsheet – the financial stack needed to make it a ‘go’ project just isn’t working out. After taking a harder look at the property, he realized an empty lot adjacent to the existing building contained parking lot lighting that needed energy-saving improvements – which are eligible for C-PACE funding. His project qualifies to allow the replacement of the piece in his financial stack with the highest interest rate with zero-interest C-PACE funding, potentially making the project financially viable. An engineered, designed project sitting on the shelf for 6 months because the developer couldn’t get it to perform financially can now break ground and complete construction, making a faster return for investors and the owner.