PACE is a state-legislated program that provides long-term financing of renewable energy, energy efficiency, and water conservation projects for property owners.
PACE funds are sourced from private or institutional investments and are secured against the property value with an assessment on the property taxes. PACE can cover 100% of the project costs with financing terms up to 20 years, and the property tax assessment is automatically transferable upon a property sale. The PACE tax assessment is non-accelerating and generally viewed as off-balance sheet. PACE financing can be utilized with leased commercial properties with long term tenants as both the property tax and utility costs are passed through to the lessee.
Over 30 states and 400 municipalities have enacted PACE legislation with the list rapidly expanding, and over 200 commercial PACE deals have been successfully transacted. Contact us to find out more about your project location.
PACE financed projects are typically cash flow positive in the first year of operation. PACE loans finance projects that increase the property value, free up accrued facilities budgets, and create higher asset to debt ratio. Some other benefits of PACE are:
- PACE financed projects are typically cash flow positive in year 1 and throughout the term.
- Flexible terms up to (20) Years and fixed semi-annual payments.
- No personal or corporate guarantees are required. Financing is secured against the property value, not the business operating results.
- All project costs and loan/deal fees are covered in PACE
- The PACE obligation is non-accelerating so the potential lien value is only about 1% of the property value.
- PACE loans are senior to the mortgage and lender consent is required. This position makes them secure investments for our potential PACE bond buyers. We can also provide mortgage refinancing if necessary.
- Property taxes are typically covered in operating expenses and as such are generally not shown on the balance sheet.
- Upon sale of the property, PACE payments are automatically transferred to the new owner.
- PACE financing can be leveraged to increase the property value, free up accrued facilities budgets, and create a higher asset-to-debt ratio.
- PACE financing is ideal for Leased properties with triple-net terms as tax payments and utility costs are passed through to tenants.