The commercial real estate finance industry is at the vanguard of what has the potential to be an enormous transformation, similar to the rise of CMBS lending in the early 2000s.
A relatively nascent form of financing known as Commercial Property Assessed Clean Energy — or C-PACE — has been rapidly evolving from an inexpensive way to finance sub-million-dollar retrofits to becoming an integral part of the capital stack for large new construction and redevelopment projects nationwide.
C-PACE financing is a tool for funding energy efficiency, renewable energy and resiliency improvements made to commercial properties. Through this program, property owners are able to finance 100% of the upfront costs associated with these improvements with zero out-of-pocket costs. C-PACE is repaid typically over 20 to 30 years through a voluntary tax assessment on the property.
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