Developers
What Commercial Real Estate Developers Need to Know About the New Garden State C-PACE Program
The Garden State C-PACE Program can provide up to 35% of your capital stack at a lower cost, with long-term, non-recourse financing that is tied to the building. Eligible improvements include energy efficiency, renewable energy systems, and resiliency enhancements for office, retail, multifamily, industrial, agricultural, and institutional/nonprofit buildings, including churches, schools, and medical facilities. Keep reading to see why you should consider C-PACE financing for your next project.
Overview of C-PACE:
The Commercial Property Assessed Clean Energy (C-PACE) program is a financing tool designed to support energy efficiency, renewable energy, and water conservation improvements in commercial properties. The New Jersey Garden State C-PACE Program provides developers with access to low-cost, long-term financing for enhanced building features. A new construction project that demonstrates a greater than 5% improvement over the applicable State Energy Subcode minimum qualifies for a base maximum percentage of 30 percent, with additional bonuses for special elements up to a maximum of 35%.
Key Features of the Garden State C-PACE Program:
- The program is administered by the New Jersey Economic Development Authority (NJEDA).
- Technical evaluation is done using the Whole Building Model Approach. Plans must be approved by a technical reviewer. The developer must also have financing lined up in order to submit a project for NJEDA approval.
- We can assist you with this.
Why You Should Consider C-PACE for Your Conersion or New Development
All new buildings should exceed standard code requirements for energy usage, GHG emissions, and resiliency. Better buildings mean higher asset values and better operational performance. Renewables and energy efficiency aren’t just good for the environment, they’re also good for your bottom line. Financing a significant enhancement to your proposed development through C-PACE is a smart move, both for you and for the investor. You save money, avoid using your own capital, and give someone else a stake in your success. C-PACE investors, typically insurance companies and pension funds, benefit from long-term stable returns. C-PACE is available at low market rates, does not increase your debt, and serves as a long-term investment in your asset value. It also gives your property a competitive edge in the marketplace.
If you have completed an eligible project within three years prior to submission, you may qualify for refinancing. We can assist you with this.Eligibility:
- Available for commercial, industrial, multi-family (5+ units), agricultural, and nonprofit/institutional properties such as hospitals, churches, and schools.
- Eligible improvements include energy efficiency upgrades, renewable energy installations (solar, wind, etc.), water conservation and other resiliency projects.
- Financing is available to properties and owners that meet eligibility and underwriting requirements.
Financing Terms:
- Financing is repaid through a special assessment added to the property tax bill, typically over 10 to 30 years.
- The amount financed can cover up to 35% of the cost of eligible projects.
- Long-term financing offers lower interest rates compared to traditional loans, equity, or mezzanine financing, reducing costs and financial barriers for developers.