By Woolsey McKernon and Chris Robbins, CleanFund
Scotsman Guide | Nov. 1, 2018
As the Commercial Property Assessed Clean Energy (C-PACE) financing sector matures, more real estate owners, developers and mortgage brokers are discovering that C-PACE offers the kind of flexibility and lower costs of capital that can move the needle on certain projects. It can play a critical role in the capital stack.
Commercial mortgage brokers who are educated on the versatility of this product are using it to create new business opportunities and to differentiate themselves from their fellow brokers in the marketplace.
At its roots, C-PACE is a financial tool that was developed to help update the nation’s aging and inefficient infrastructure, and to make it easier for property owners to invest in energy efficiency, water conservation, renewable energy and safety upgrades that improve their buildings and the environment. These tangible benefits are heralded by lenders that are now considering how C-PACE helps increase collateral value.
As importantly, commercial mortgage brokers who include C-PACE in their product offerings can provide potential clients with access to a direct form of less-expensive capital. C-PACE lenders typically charge interest of 6 percent to 7 percent. As a result, C-PACE financing gives brokers a competitive advantage with potential clients. It also ultimately helps to close more deals.
Brokers, developers and investors who stay on top of financing trends are learning how to execute successful C-PACE deals, including how to use new online lending platforms to prequalify certain projects and get indicative pricing that can be easily included in deal proposals. If you’re still learning about this product, however, you may have some questions, including: Why is C-PACE’s popularity growing so fast and where is it available?