C-PACE Financing Becomes a Preferred Solution for California Developers
More commercial property owners and developers with access to private capital are using it to finance sustainability measures in commercial projects pre-, mid- or post-construction.
In states that recognize clean energy as a public benefit (most notably California), C-PACE financing is repaid as a benefit assessment secured by the property itself.
This financing has closed alongside hundreds of banks, debt funds, life insurance companies and other lenders nationwide to complete development capital stacks, provide incremental leverage, fund capital expenditures or recapitalize recently completed projects, according to Cory Jubran, senior director of originations, at Nuveen Green Capital (NGC).
The recapitalization is deployed after a project's energy, water efficiency or resiliency improvements have already been completed, typically to replace or restructure more expensive existing capital and free up liquidity for the owner.
"This is an increasingly common approach, and NGC is seeing a growing number of recapitalizations across its portfolio," Jubran told GlobeSt.com.
C-PACE's low-cost, fixed-rate, long-term financing is benefiting property owners and developers, who are increasingly turning to it as a solution, Jubran told GlobeSt.com.
Last week, NGC announced its first stadium project using this structure, providing $49.7 million in C-PACE financing to recapitalize Frontwave Arena alongside senior lender Endeavor Bank. The development is taking place in California's Oceanside.
Frontwave Arena calls for 7,500 seats for a sports and entertainment venue spanning 171,000 square feet. Located within El Corazon, a 465-acre master planned development, the arena is home to the San Diego Clippers G-League basketball team.
The deal stands out with a notable sponsor, underscoring C-PACE's flexibility to finance large-scale projects across asset classes and at various stages of completion, in this case, a recapitalization.
The property features premium fan experiences including local craft food and beverage concessions, premium seating, 16 luxury suites, VIP viewing decks and exclusive lounges.
The C-PACE financing also provided the sponsor with access to future working capital, unlocking meaningful liquidity while positioning the asset for long-term operational success.
California has seen a long history of public-private partnerships and recapitalization of sports stadiums, often involving state or local funding, tax benefits and land value capture mechanisms.
Source: GlobeSt/ALM