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C-PACE touted as a financing fit for ground-leased properties
Commercial Observer says C-PACE assessments are structured to run with the land and are typically fully amortizing, often over terms up to 30 years.
Commercial Observer argues that Commercial Property Assessed Clean Energy financing, or C-PACE, can help unlock projects built on ground leases, which are common in high-value markets like Manhattan and often used when the land is owned by universities, public authorities, institutions, or large corporate entities.
The outlet says ground leases can complicate property financing because lease provisions may govern assignments, subletting, mortgages, and ownership transfers, and mortgage lenders may need to assess what happens to their collateral if the lease expires or is is terminated.
According to Commercial Observer, C-PACE is typically fully amortizing with fixed rates over the long term, often up to 30 years, and it is designed to complement construction and permanent financing while improving project cash flow and lowering refinancing risk through long-term capital.
Commercial Observer also notes that C-PACE assessments do not rely on financial covenants requiring explicit consent or approvals to restrict key lease-related transactions, and it highlights that because C-PACE payment obligations run with the land, a maturing ground lease can present less collateral risk to the C-PACE provider than it may for a mortgage lender.