{"id":1004746054,"date":"2025-02-05T11:57:16","date_gmt":"2025-02-05T19:57:16","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004746054"},"modified":"2025-04-30T06:44:08","modified_gmt":"2025-04-30T14:44:08","slug":"capital-ideas-why-c-pace-lenders-remain-resolute","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-why-c-pace-lenders-remain-resolute\/","title":{"rendered":"Capital Ideas: Why C-PACE Lenders Remain Resolute"},"content":{"rendered":"
\n
\"Photo
Therese Fitzgerald<\/figcaption><\/figure><\/div>\n\n\n

Over the past decade, green financing for commercial real estate has been growing steadily. There are now a variety of debt instruments that allow property owners and developers to access capital for the purpose of making properties eco-friendlier and more resilient. Tax credits for certain green investments are another financing tool.<\/p>\n\n\n\n

And that got me wondering: With President Trump taking aim at what he has called \u201cgreen new deal policies\u201d at the federal level and casting doubt on climate change generally, could the commercial real estate capital markets make a retreat from sustainability?<\/p>\n\n\n\n

Time will tell, but two C-PACE lenders I spoke with last week are confident that their product will remain in demand despite the messages coming from Washington.<\/p>\n\n\n\n

The Commercial Property Assessed Energy Program<\/a>, otherwise known as C-PACE, was launched in 15 years ago to provide property owners with low-cost, long-term (25 to 30 years) financing for sustainability and efficiency improvements, with borrowers repaying their loans through a special tax assessment. The program is authorized by state legislation\u2014not the federal government\u2014and currently 40 states have C-PACE programs.<\/p>\n\n\n\n

\u201cC-PACE is private capital, not federal funds, so changes to budgets, incentives, and such have little to no impact on C-PACE operations,\u201d said Jessica Bailey, president & CEO of Nuveen Green Capital.<\/p>\n\n\n\n

Under the first Trump administration, according to Bailey, cumulative C-PACE originations grew at a CAGR of roughly 160 percent, and the program expanded from five to 18 states. \u201cC-PACE has consistently been a purple policy,\u201d Bailey said.<\/p>\n\n\n\n

The program really took off, however, during COVID and then when interest rates spiked. By the end of 2023, $7 billion of C-PACE financing had been completed <\/a>to date and $2 billion of that was completed that year, according to C-PACE Alliance.<\/p>\n\n\n\n

Demand-drivers<\/h2>\n\n\n\n

A big driver of C-PACE activity has been the need for property owners to meet the wave of local and state building performance standards aimed at reducing GHG emissions from buildings. According to PACE Equity data, currently 40-50 cities have rolled out or are in the process of rolling out building performance standards. (See map)<\/p>\n\n\n\n

\u201cThat to me is evidence that this is really a bottom-up, grassroots effort across the country,\u201d said Beau Engman, president & founder of PACE Equity.<\/p>\n\n\n\n

\"Map<\/a>
Markers indicate cities with BPS. Stripes indicate states with BPS.
Source: PACE Equity\/imt.org, July 2024<\/figcaption><\/figure>\n\n\n\n

Engman also pointed to how building codes across the country are changing to align with the goals of the Paris Accord, which, incidentally, President Trump withdrew the U.S. from (once again) on his first day in office.<\/p>\n\n\n\n

\u201cRegardless of what happens there, there is a trajectory that\u2019s very consistent on building codes improving at a steady rate,\u201d Engman said.<\/p>\n\n\n\n

But the real seal of approval, Engman said, comes from the lenders whose consent is needed to make C-PACE part of a project\u2019s capital stack.<\/p>\n\n\n\n

C-PACE has expanded despite the anti-ESGE backlash from politicians and some corners of the investment world. Will that sentiment be emboldened by Trump’s disdain for Biden-era sustainability initiatives? Perhaps.<\/p>\n\n\n\n

Nevertheless, Bailey pointed to C-PACE’s benefits beyond lowering emissions that will help ensure the program’s longevity. \u201cWhile the focus may turn away from ESG,\u201d she said, \u201cwe believe there will be an emphasis on economic development and resiliency. C-PACE has funded many resiliency projects, and this number is steadily increasing. In addition, to date, over 49,000 jobs have been created by NGC\u2019s C-PACE financed projects.\u201d <\/p>\n\n\n\n

It will also continue to be a “cost-effective” financing tool in what looks to be an uncertain rate environment going forward, she said.<\/p>\n","protected":false},"excerpt":{"rendered":"

States and cities are likely to continue decarbonizing even if the federal government reverses course. <\/p>\n","protected":false},"author":756,"featured_media":1004706954,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,21684],"tags":[],"class_list":["post-1004746054","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-viewpoint"],"acf":[],"yoast_head":"\nCapital Ideas: Why C-PACE Lenders Remain Resolute - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-why-c-pace-lenders-remain-resolute\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Capital Ideas: Why C-PACE Lenders Remain Resolute\" \/>\n<meta property=\"og:description\" content=\"States and cities are likely to continue decarbonizing even if the federal government reverses course.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-why-c-pace-lenders-remain-resolute\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2025-02-05T19:57:16+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-30T14:44:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"804\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Therese Fitzgerald\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-why-c-pace-lenders-remain-resolute\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-why-c-pace-lenders-remain-resolute\/\",\"name\":\"Capital Ideas: Why C-PACE Lenders Remain Resolute - 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