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Happy Friday, and welcome back. We were on holiday last week, but now, we are back to our regularly scheduled programming. C-PACE Weekly is your go-to source for the latest insights, updates, and opportunities in the Commercial Property Assessed Clean Energy (“C-PACE”) sector. Let’s dig into the latest news!

August 23, 2024

✅ NYC C-PACE is Go For Launch

Key Takeaways for NYC’s C-PACE Program Guidelines

TL;DR

1. C-PACE loans are capped at 30% of the total construction costs, excluding land or property acquisition costs.

2. There is no required Savings-to-Investment (SIR) ratio for projects involving new construction or comprehensive rehabilitation.

3. The loan term under C-PACE financing has no specified limit.

4. Projects must qualify as "Low Carbon Buildings" (further defined below) designed to emit no more than 25 kg of CO2 per million BTU.

5. All installed devices must adhere to the specified carbon emission limit, except those not connected to the building's gas or fuel oil systems, those used for manufacturing or commercial kitchen operations, or those providing emergency or standby power.

Eligible Costs for PACE Financing PACE loans can fund various improvements but are strictly limited to eligible costs. These include energy-efficient improvements, energy audits, feasibility studies, and related soft costs. It's important to note that these expenses are capped at 30% of the total project costs. This ensures that PACE financing is used specifically for energy-related enhancements that align with the program's goals.

Low-Carbon Building Requirement: Projects involving major renovations or new construction must adhere to low-carbon building standards to qualify for PACE financing. This requirement minimizes the building's emissions, supporting broader environmental goals.

What Defines a Low Carbon Building? A low-carbon building is one that is engineered and operated to minimize emissions. Specifically, any device, machinery, or system installed in the building must not emit more than 25 kilograms of carbon dioxide per million British thermal units (BTU) of energy. The United States Energy Information Administration established this standard. However, there are essential exclusions to this definition, including:

1. Devices not connected to the building’s gas or fuel oil systems, used intermittently, or not for heating or hot water supply.

2. Buildings emitting more than the specified carbon dioxide limit due to necessary activities such as manufacturing, laboratory operations, hospital functions, crematoriums, or commercial kitchens.

3. Excessing the emission limit is necessary when providing emergency or standby power or other uses permitted by specific rules from the Department of Buildings.

Understanding these requirements is essential for developers and property owners leveraging PACE financing. By adhering to these standards, projects can secure the necessary funding while contributing to a more sustainable future.

More information 👇

1. NYC C-PACE: One-Pager 

2. NYC C-PACE: Program Guidelines

HALL Arts Hotel Scores $27M C-PACE, Popular Amid Tight Lending

The HALL Group used the clean energy financing to recapitalize recent upgrades to HALL Arts Hotel. 

The Dallas-based developer secured a $27 million loan from the Commercial Property Assessed Clean Energy program, which is administered through the Department of Energy to support energy efficiency projects. 

Lone Star PACE is the C-PACE Administrator for the deal. 

Read more here.

PLG provides $10.6MM in C-PACE Financing for 114-unit Project in Philly

PACE Loan Group (PLG) has provided $10.6 million in C-PACE financing for a 114-unit multifamily project in Philadelphia. The site at 1440 Front St. in the city’s Fishtown neighborhood is an assemblage of six vacant city lots. The project will include five studios, 95 one-bedroom units, 14 two-bedroom units, a fitness center, a business center, and 2,083 square feet of retail space. Matthew McCormack of PLG originated the loan on behalf of the borrower, Archive Development.

Read more here.

Want to learn more about C-PACE? Get started with the articles below:

• What You Need To Know About C-PACE

• Step-By-Step Guide

• History of C-PACE

• Policy & Legislative Framework

• Eligibility of C-PACE

Have a story we missed? Drop us a note → [email protected]

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About C-PACE.COM

Need C-PACE financing for your project? Fill Out This Form Here.

C-PACE.COM was founded by investment professionals with meaningful experience in real estate investment banking, private credit, private equity, and development. Through C-PACE Financing, we seek to reduce the carbon footprint created by commercial real estate and generate superior risk-adjusted returns for our clients.

At C-PACE.COM, we are the #1 Trusted Source for C-PACE loans and actively lend across all asset types and geographies in the U.S.

If you have any questions regarding C-PACE or want to discuss your project further, drop us a line → [email protected].

Thanks for reading!

Cheers,
Jonathan Seabolt
Founder & CEO
C-PACE.COM