SFA Research Corner – Bringing Private Funding to the Decarbonization of Commercial Real Estate—C-PACE ABS

On March 31 Greenworks Lending issued C-PACE 2023-1, a $256 million transaction backed by Commercial Property-Assessed Clean Energy (C-PACE) loans that facilitate the financing of energy efficiency and renewable energy improvements on commercial properties. In the collateral pool are loans to hotel, multifamily, office, retail, industrial, and esoteric properties across 16 states. C-PACE originations have picked up in recent years according to a DBRS Morningstar commentary, with $1.3 billion and $1.51 billion being recorded in 2021 and 2022, respectively. As more states and municipalities enact net-zero rules for building stock, property owners will have to come into compliance with caps on GHGs and energy consumption, which could translate into higher supply of PACE ABS. According to Finsight, roughly $8 billion of ABS backed by PACE loans have been issued since 2014.  Read more.