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Commercial Property Assessed Clean Energy Financing: C-PACE Structure, Documentation, and Project Approval

Recording of a 90-minute premium CLE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
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Conducted on Thursday, February 20, 2020

Recorded event now available

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This CLE course will provide real estate finance counsel with the tools to structure commercial property assessed clean energy (C-PACE) financing, where a loan for energy efficiency or renewable energy projects can be repaid via an assessment on the borrower's property tax bill. The panel will discuss the current state of the market, the project approval process, documentation, and structuring concerns for developers and lenders.


C-PACE financing is one of the fastest-growing sources of capital for new construction, retrofit, and renovation projects throughout the country. C-PACE programs allow for long-term, fixed-rate financing of energy efficiency, renewable energy, and water conservation components of real estate projects, repaid through property tax assessments. It often replaces more expensive pieces of the construction capital stack, like mezzanine debt or preferred equity. But there are structuring and approval issues to consider first.

C-PACE financing has a unique lien position. It becomes part of the property tax bill, but in the event of a default in the payment of a C-PACE assessment obligation, only the past due portion of the C-PACE financing is senior to a mortgage lender's claim. A senior lender can foreclose on its mortgage interest in the property in the event of a default on the senior lender's debt in the same manner as if it was the sole lienholder. There is no intercreditor agreement, so the C-PACE lender does not have any right to prevent or impact the senior lender's foreclosure.

Currently, over 35 states have passed legislation enabling C-PACE financing and establishing decisionmaking bodies at the state and/or local level. In some states, a threshold requirement is that an environmental consultant determines that the operational savings achieved by the financed improvements over the term must outweigh the cost of the improvements. Depending on the jurisdiction and type of energy-efficient improvements installed, C-PACE projects increase a property's net operating income and valuation.

Listen as our authoritative panel examines the approval framework for C-PACE financing, and the structuring and documentation of C-PACE transactions.



  1. C-PACE regulatory framework
    1. State enabling legislation
    2. Approval authority at the state and/or local levels
    3. Project approval process
  2. Structuring concerns
    1. Lenders--typically private equity lenders
    2. Creating additional tax assessment
    3. Repayment of lender
    4. Relationship of C-PACE loan to senior mortgage and other financing
    5. What happens in the event of default


The panel will review these and other key issues:

  • Which states currently have approval mechanisms in place for C-PACE financing on commercial property?
  • What are the typical requirements for an energy efficiency project to seek C-PACE financing?
  • How are C-PACE transactions structured and documented?
  • What are the remedies for the lender and the tax assessor in the event the borrower/developer defaults on a C-PACE loan?
  • How does a default in senior financing impact the C-PACE financing?


Burgers, Kristen
Kristen E. Burgers

Hirschler Fleischer

Ms. Burgers represents debtors and creditors in bankruptcies and financial workouts in Virginia, the District of...  |  Read More

O’Malley, Carrie
Carrie Hallberg O'Malley

Partner, Chair Commercial Real Estate Finance and Investment Practice Group
Hirschler Fleischer

Ms. O’Malley leads the firm’s multidisciplinary commercial PACE (C-PACE) team, which to date, claims...  |  Read More

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