What is C-Pace
Commercial Property Assessed Clean Energy (“C-PACE”) is an innovative financing mechanism of low-cost, long-term non-recourse capital for new construction or gut rehabs of commercial real estate. C-PACE is used to finance 100% of eligible hard and soft costs for a project (approximately 20-25% of total development budget) and secured by a special assessment against the property. Repayment of the assessment financing is done via the building owner’s property tax bill with payments due concurrent with ordinary property tax payments.
Why Eyzenberg GreenCap
Eyzenberg GreenCap is a partnership between Eyzenberg & Company (“Eyzenberg”) and Greenworks Lending (“Greenworks”) uniquely dedicated to funding commercial real estate transactions through C-PACE.
Reduce Blended Cost of Capital
- Fills the gap between senior debt and equity at lower pricing than alternative capital structures like mezzanine debt or preferred and common equity.
- Potential to recoup C-Pace assessment costs by passing through to hotel guests or commercial tenants.
Creates Optionality to Capitalize Your Projects
- Can be used to reduce the amount of senior debt to a level necessary to attract financing and does not require an intercreditor agreement.
- Provides an optional capital structure for situations where structured finance may not be available due to market or size of the transaction.
Off-balance Sheet Potential
- Many owners treat property taxes (ad valorem and special assessments) as an operating expense with some electing to pass on the costs to tenant or guests.
- Fully assumable and assignable upon a sale of the asset creating option value in a moving interest rate environment.
- Ability to capitalize costs incurred retroactively within the prior 36 months.
De-risks the Capital Stack for the Borrower
- No repayment or carry guarantee and covenant light.
- Repayment is based on a self -amortizing structure avoiding balloon, interest rate or refinance risk at any point while the loan is outstanding.
- C-PACE is non-accelerating beyond the current year’s assessment and can never be fully called upon a sale or payment/technical default.
- As a “silent” capital provider C-PACE does not require complicated intercreditor or recognition agreements with senior lenders, only a simple acknowledgement and consent form.
A Crucial Piece of the Puzzle
- Can be utilized in tandem with a ground lease structure due to C-PACE flexibility of being assessed against a leasehold or leased fee position.
- Perfect long-term match for Opportunity Zone deals with required long dated hold periods.
- Commercial condominiums are eligible in certain cases.
- Sponsor equity requirements can be reduced for Historic and New Market Tax Credit projects.
A national lender, Eyzenberg GreenCap provides C-PACE financing in 24 States and the District of Columbia. States include: CA, CO, CT, DE, FL, IL, KY, MA, MD, MI, MN, MO, NE, NV, NY, OH, OK, OR, PA, RI, TX, UT, VA and WI.