By Anca Gagiuc
Petros PACE Finance closed on a $1.3 million Commercial Property Assessed Clean Energy (C-PACE) deal that will fund energy upgrades to a Houston office building located at 1225 North Loop West. The project marks the first occasion that any C-PACE program in Texas has been used to fund energy efficiency improvements to a multi-tenant office building.
The owner of the building, 1225 North Loop Investments, Inc., will install in the 200,400-square feet property new chillers with associated water pumps, variable speed drives and air handles, a building control system and LED lighting. As with all the other C-PACE financed assets, the project will be finalized with no out-of-pocket expense to the investment group. The upgrade is said to save the owner more than 1.5 million kilowatt hours in energy use and $2.9 million in energy costs over the term of the 20-year loan. In other words, the owner will save more than $3.6 million during the next 20 years.
“Outdated mechanical and building systems result in higher utility and operating costs for landlords and tenants, but financing energy efficiency upgrades is often a challenge for owners of older buildings,” Petros CEO Mansoor Ghori said in prepared remarks. “This C-PACE loan will finance the improvements to 1225 North Loop West at no cost to the owner while spreading the cost out over many years with the certainty of a fixed-rate loan.”
Existing green systems
The Class A property was completed in 1984 and already outperforms many newer office buildings in terms of energy efficiency—it meets more than 50 percent of its electricity needs through renewable wind sources and has received six ENERGY STAR awards since 2010.
“PACE Houston is pleased to have facilitated the first multi-tenant office building PACE project in the State of Texas,” added PACE Houston President Tim Crockett. “Petros showed its substantial expertise throughout the underwriting process of this project. We believe this project will demonstrate the huge value PACE can provide a building owner and thus lead to more owners using this powerful tool.”
Images courtesy of Petros PACE Finance