Commercial Property Assessed Clean Energy (C-PACE) financing is a state-legislated program allowing owners and developers to finance previous or upcoming construction improvements through an optional property assessment. C-PACE tax assessments are long-term, fixed-rate and non-recourse. The program provides a low-cost alternative to mezzanine debt or preferred equity.
C-PACE can provide the property owner with funding of up to 35% of total development costs by placing a special assessment on the property. This assessment is structured like a traditional loan but is repaid annually through a property tax bill.
C-PACE is typically a 20- to 30-year term plus the construction period. During the construction period, interest is capitalized and added to the total funding amount, giving property owners time to ramp up operations before incurring any payments.
In addition, C-PACE tax assessments are fully transferable between owners since it is tied to the land, and since it is a tax, it may be passed along to a building's tenant.
While the property owner may voluntarily prepay a C-PACE assessment at any time, C-PACE assessment liens do not and cannot be accelerated and can only be enforced for the delinquent assessment amounts.
Peachtree Group is a senior bridge and construction lender that can provide C-PACE financing on projects currently under construction or completed within the last 36 months. The program is available for all commercial real estate asset classes.
Learn more about C-PACE Financing or contact the Peachtree C-PACE team.
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