C-PACE Financing For Commercial Real Estate In 2024

Commercial property-assessed clean energy financing (also known as C-PACE financing) continues to become more popular with commercial real estate owners who see it as a resource for lowering the cost of capital and enhancing energy efficiency. This financing program offers flexibility, low-cost and non-recourse options secured by a special assessment linked to the property, up to 35% of its stabilized value. Repayment obligations transfer with property ownership, allowing for prepayment at any juncture.

 
As commercial real estate financing costs have fluctuated wildly in the past 18 months, utilizing C-PACE consistently blends down the cost of bridge debt to around SOFR + 375-425, according to our in-house data along with historical data from the Mortgage Bankers Association and Commercial Mortgage Alert, an industry research group.