Press Release | June 4, 2019
Sausalito, CA -- CleanFund, the leading nationwide Commercial Property Assessed Clean Energy ("C-PACE") origination platform, announced today a major financial commitment from Starwood Sustainable Credit, an affiliate of Starwood Capital Group, for C-PACE investments originated by CleanFund. In addition to capital already invested, Starwood has committed up to more than $500 million of additional C-PACE investments to support the adoption of clean energy and other value-added improvements to commercial properties nationwide. In addition, entities affiliated with Vulcan Capital have made a follow-on investment in CleanFund, atop their investment in 2017.
Concluding a search effort over recent months, the firm also named Lain Gutierrez as CEO, a seasoned financial services and PACE industry veteran.
"CleanFund has been the leader in taking C-PACE to nearly $1 billion in total funding since inception of this innovative tool, and our aim is to extend that several fold as more property owners learn about the advantages of C-PACE," said Gutierrez, a banking and structured finance executive with over 28 years of experience in originating, analyzing, structuring and rating asset-backed financings.
Gutierrez most recently founded SolFin Capital, LLC, a specialty finance company with institutional backing which finances solar arrays in new residential developments. Prior to SolFin, he was a senior rating analyst at DBRS, Inc. where he was responsible for clean energy and energy-efficiency financing, including Property Assessed Clean Energy (PACE) and the rating of CleanFund's 2018-1 AAA-rated note – the first 144A C-PACE securitization in the industry. At DBRS, he led efforts to publish a new methodology for rating PACE in July 2015 and Energy Savings Performance Contracts (ESPC) in December 2016.
"We're excited about the new chapters these announcements hail for CleanFund and for commercial real estate owners seeking cost-effective financing for environmentally-friendly improvements," said CleanFund founder, John Kinney. Kinney is moving to chairman of the board. As founder and chairman, he will continue to focus on the future of the C-PACE industry that he helped launch ten years ago.
Jake Baker, Managing Director and Head of Starwood Sustainable Credit, said, "We are pleased to be making investments with CleanFund that will help grow the significant opportunity in Commercial Property Assessed Clean Energy." "C-PACE, even with its significant growth to date, is still a largely untapped opportunity in the multi-trillion-dollar commercial real estate industry," Baker added. "More and more building owners, real estate lenders, and investors are embracing this innovative tool for optimizing the capital stack while providing highly competitive rates for energy, water, seismic and other improvements."
Ben Kolpa, Managing Director, Vulcan Capital said, "Vulcan Capital remains committed to backing businesses that have social and environmental impact, but also deliver a financial return to its customers. CleanFund's solutions drive the movement towards sustainable real estate and Vulcan couldn't be more pleased with C-PACE's impact on building's carbon footprint."
C-PACE financing was introduced in California in 2008 as a form of voluntary parcel tax assessment financing to fund qualifying improvements that reduce energy and water usage, and that provide seismic and other resiliency benefits to commercial properties. C-PACE financing for commercial real estate, which has been adopted in 35 states and the District of Columbia, allows property owners to repay qualified investments for building upgrades and new construction as a line item on the property's ordinary property tax bills.
About Starwood Sustainable Credit, Inc. and Starwood Capital Group
Starwood Sustainable Credit, Inc. is a newly launched affiliate of Starwood Capital Group focused initially on providing capital funding for C-PACE financing. Starwood Capital Group is a private investment firm with a core focus on global real estate, energy infrastructure and other related strategies. Starwood Capital and its affiliates maintain 13 offices in five countries around the world, and currently have approximately 4,000 employees. Since its inception in 1991, Starwood Capital has raised $45 billion of equity capital, and currently has in excess of $60 billion of assets under management. The Firm has invested in virtually every category of real estate on a global basis, opportunistically shifting asset classes, geographies and positions in the capital stack as it perceives risk/reward dynamics to be evolving. Over the past 27 years, Starwood Capital and its affiliates have successfully executed an investment strategy that involves building enterprises in both the private and public markets. Additional information can be found at http://www.starwoodcapital.com/
About Vulcan Capital
Vulcan Capital is the multi‐billion-dollar investment arm of Microsoft co-founder and philanthropist Paul G. Allen. This investment was made by Vulcan Capital's impact lending strategy, which is focused on making investments that primarily deliver attractive risk-adjusted financial returns while at the same time providing meaningful, measurable social or environmental impact. The strategy focuses on sustainability, health & wellness, and community building to create long-term value and meaningful impact at scale. Investments will be mainly focused in the U.S. and will leverage Vulcan's diverse and wide-ranging operations. A major area of focus will be renewable projects and other businesses focused on addressing climate change. For more information, visit capital.vulcan.com