How To Pay For Upgrades to a Commercial Property?
Are you like many Texas property owners who have a list of upgrades you would like to complete on your commercial property, but wonder if it’s the right time to tie up funds in such investments? Do you want to update the HVAC system, lighting, faucets, windows, roofing, etc. but wonder how you will cover the costs?
Well, there is a program you might not know about that helps you make the upgrades now, realize the cash flow benefits monthly from lower utility bills – and spread out payments over much longer terms than usual. It’s called C-PACE, the Commercial Property Assessed Clean Energy program, and it’s available here in the Great State of Texas.
In short, qualifying investments on commercial properties may be eligible for special financing terms, which also come with decreased risk to the property owner. Improvements that help a commercial property with water or energy efficiency or conservation may qualify. These same improvements can help lower your utility bills, which improves cash flow. Those monthly savings usually more than cover the payments of the loan.
Moreover, C-PACE is non-recourse, that is, secured by an assessment of the property rather than the business of the property owner. By attaching the assessment to the property, it allows C-PACE financing to seamlessly transfer to a new property owner in the event of a sale rather than being accelerated and coming due like most traditional financing. This difference is significant.
Additionally, if the building were to be sold, its value is enhanced by the capital investments.
PACE is also an attractive option for acquisition rehab where many improvements must be made to a property to bring it to code or even add aesthetic value while also promoting a sustainable building.
How do you find out if your project qualifies? The easiest way is to contact your local PACE administrator and talk to them about how PACE financing can help.