C-PACE Financing for
Commercial Real Estate
C-PACE (Commercial Property Assessed Clean Energy) has grown from a niche sustainability tool to a mainstream commercial real estate financing instrument, with annual originations exceeding $3.5 billion. It offers long-term, fixed-rate, non-recourse capital for energy efficiency upgrades, renewable energy installations, and resiliency improvements — often covering 100% of eligible project costs, with repayment structured as a property tax assessment rather than a traditional loan payment. Gumption connects commercial property owners and developers with C-PACE lenders and helps match C-PACE with the broader capital stack, whether as standalone improvement financing or layered alongside senior debt in new construction and renovation projects.
What Is C-PACE Financing?
C-PACE is a financing structure in which commercial property owners borrow money for qualifying improvements and repay through a voluntary property tax assessment, typically over 15 to 30 years. Key characteristics:
- Fixed-rate: rates are locked for the full term at closing
- Non-recourse: repayment is secured by the property assessment, not the borrower's personal guarantee
- Long-term: 15- to 30-year amortization, matching the useful life of the improvements
- Assessment runs with the property: C-PACE assessments can transfer to a new owner upon sale
- Covers up to 100% of eligible hard and soft costs: typically 30–35% of total project cost for new construction, up to 100% for qualifying renovations
What Can C-PACE Finance?
Eligible uses vary by state but typically include:
- Energy efficiency: HVAC systems, building envelope (insulation, roofing, windows), lighting upgrades, and controls
- Renewable energy: solar photovoltaic, solar thermal, wind, and geothermal systems
- Energy storage: battery storage systems
- Water conservation: efficient plumbing fixtures, greywater recycling, and irrigation systems
- Resiliency: seismic retrofits, storm hardening, and flood mitigation (state permitting)
- New construction: in many states, C-PACE can fund the green/energy-efficient components of a new development
C-PACE in the Capital Stack
C-PACE is increasingly used as a strategic capital stack tool, not just a sustainability financing mechanism. Because it is repaid as a property tax assessment rather than conventional debt, C-PACE can:
- Reduce required equity by substituting fixed-rate C-PACE proceeds for higher-cost equity or mezzanine debt
- Layer behind or alongside senior debt without counting as additional leverage in conventional underwriting
- Fund improvement budgets in renovation and value-add projects without tapping additional equity
- Support new construction by funding 30–35% of eligible costs at fixed rates below construction loan pricing
Note: C-PACE assessments take a senior lien position alongside property taxes, requiring existing mortgage lender consent. Senior lenders have become increasingly comfortable with C-PACE as the market has matured, with many major institutions offering formal consent processes.
Why Use Gumption for C-PACE?
- Access to C-PACE lenders across all active C-PACE states alongside conventional capital sources
- Gumption advisors can help you model how C-PACE fits into your capital stack alongside senior debt and equity
- Compare C-PACE terms with mezzanine and preferred equity alternatives to identify the lowest blended cost of capital
- Free to submit and receive term sheets — Gumption charges borrowers an origination fee only when a loan closes with a recommended lender
HOW IT WORKS
How It Works
FAQ
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any questions?
Interested in C-PACE financing?
Submit your project at gumption.dev — free to submit, 5 minutes.