COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY (C-PACE)

C-PACE, or Commercial Property Assessed Clean Energy, is a specialized financing mechanism designed for commercial property owners to fund energy efficiency, renewable energy, and other eligible improvements to their properties. Unlike traditional loans, C-PACE financing is repaid through a special assessment added to the property’s tax bill, making it unique in its approach and benefits.

 

                            Key Features of C-PACE Financing:
 

·       Non-Recourse and Transferable: The financing is non-recourse to the property owner, meaning the loan            is secured by the property itself, not the owner's personal credit. Additionally, it is fully transferable with          the property, making it an attractive option for property buyers.

·       Long-Term Amortization: C-PACE offers long-term financing with amortization periods typically ranging            from 20 to 30 years, and in some cases, the duration can be tailored to meet specific project needs.

·       Subordinate Position: The principal of a C-PACE loan is subordinate to senior mortgages and other                      existing financing. It cannot accelerate, providing stability and predictability for property owners.

·       Priority Repayment: Payments are made through a special assessment on the property tax bill, giving C-          PACE repayments priority similar to property taxes.

·       Loan Amounts: C-PACE can finance up to 20-40% of the total project cost, with a minimum loan size of $250,000, making it suitable for substantial projects.

·       Accrued Interest: Interest can be accrued or capitalized for up to 3 years before payments begin,                          offering flexibility in managing cash flow.

·       Interest-Only Periods: In many markets, C-PACE allows for interest-only periods of up to 10 years,                          providing initial financial relief.

·       Flexible Structuring: Most markets offer flexibility in structuring the financing, including full amortization          over the entire term.

·       Annual Call Protection: There is annual call protection that gradually burns off over time, structured on a         deal-by-deal basis, providing additional stability for the financing.

       C-PACE financing is designed to support property owners in making significant improvements while                   offering long-term, flexible repayment options that align with the benefits and cash flow of the projects.