CPACE financing is an advantageous financing option for many different projects. In existing multi-use buildings, you can use this financing to make key upgrades that improve efficiency, property value, and tenant satisfaction.
What is CPACE Financing?
Commercial PACE loans are a special type of loan offered to commercial properties through the property assessed clean energy (PACE) program. Many states and municipalities throughout the country have legislation allowing CPACE financing. Essentially, this is a type of loan that provides capital for projects that meet certain criteria for energy efficiency, renewable energy, or resilience.
CPACE loans offer many advantages over using other types of financing for qualified projects. First, this financing is long-term, usually ten years or more, and offers low interest rates. Another benefit is that loan repayments appear as a property assessment on your tax bill. Also, this loan is no recourse and stays with the building. Therefore, if you choose to sell the property later, you aren’t responsible for repaying the loan.
How PACE Loans Help Improve Efficiency in Mixed-Use Buildings
Mixed-use buildings are a popular option for many real estate investors. These types of properties allow you to rent space to both residential and commercial tenants. Generally, the ground level is a retail area while the top levels are apartment units. If you own one of these properties, you may be able to use CPACE financing to make key upgrades that enhance your property’s efficiency and value.
Each location’s PACE program is a little different, so it’s important to check with your PACE lenders which projects qualify. However, generally projects that will result in energy savings for your property are likely eligible for PACE loans. For instance, common property improvements that people use PACE for include things like HVAC and lighting upgrades, installing energy efficient windows, replacing the roof with more efficient options, insulating buildings, and even installing building control systems to help reduce unnecessary energy use.
Energy efficient upgrades in your multi-use building offers a few important benefits. First, it saves you as the property owner money for energy use in common areas. However, it can also save your tenants money, both the residential and commercial tenants. This is a major selling point for many people, as more and more people want to reduce their energy use and practically everyone would like to save a little money. Therefore, PACE can help you make improvements that enhance your property overall.
Stonehill PACE – Your PACE Lenders for Commercial Properties
If you’re looking for PACE loans for multi-use properties or developments, our team is here to help. We are a direct lender for all commercial asset classes and can help you navigate the PACE process. Our team maintains relationships with program administrators across the country and we lend to a wide range of properties. Contact us today to learn more.