2024 Expected to be Another Record-Setting Year for PACE

PACE issuance got off to a strong start in 2024 as property owners looked to offset a lack of available bank debt with alternative financing solutions. 

PACE asset-backed securities volume totaled about $362 million through June 7, according to a new report from Morningstar DRBS. The robust volume comes on the heels of a record-setting 2023, when commerical PACE originations alone totaled nearly $1B nationwide.  

The delinquency rate across Morningstar’s C-PACE securitizations remained low and zero losses were recorded, per the report. 

More states and municipalities adopted C-PACE programs or enacted PACE-enabling legislation in 2023, which increased access across the U.S. and broadened the program’s reach. 

At the same time, banks eager to reduce their exposure to commercial real estate amid higher interest rates and market uncertainty curtailed lending in 2023.  

In addition to serving as a financial lifeline, C-PACE incentivizes property owners to incorporate sustainable upgrades that are becoming increasingly vital to tenant recruitment and retainment. 

More than 2,400 commercial buildings have benefitted from $2B in total C-PACE issuance since 2015, according to the U.S. Department of Energy. Many experts now predict 2024 will be another banner year for PACE, especially as the likelihood of interest rate cuts begins to fade.  

Interested in learning how your project can benefit from C-PACE? Lone Star PACE is here to help. Contact us anytime at info@lonestarpace.com or by calling 214-256-3209.