Starwood Capital Commits $500M for Clean Energy Property Improvements Nationwide
Starwood Sustainable Credit, an affiliate of Starwood Capital Group has committed more than $500 million to help California lender CleanFund finance environmentally-friendly upgrades on commercial properties across the nation.
Sausalito-based Commercial Property Assessed Clean Energy (C-PACE) origination platform CleanFund provides financing to help building owners upgrade insulation, install high-efficiency lighting and undertake other conservation measures.
In addition to the investment from Starwood, entities affiliated with Vulcan Capital have made a follow-on investment in CleanFund, atop a previous investment from 2017.
“We are pleased to be making investments with CleanFund that will help grow the significant opportunity in Commercial Property Assessed Clean Energy,” said Jake Baker, managing director of Starwood Sustainable Credit. “C-PACE, even with its significant growth to date, is still a largely untapped opportunity in the multi-trillion-dollar commercial real estate industry. More and more building owners, real estate lenders, and investors are embracing this innovative tool for optimizing the capital stack, while providing highly-competitive rates for energy, water, seismic and other improvements.”
CleanFund has also named financial services and PACE industry veteran Lain Gutierrez as CEO.
Prior to joining CleanFund, Gutierrez founded SolFin Capital, a specialty finance company which finances solar arrays in new residential developments. He has also spent time as a senior rating analyst at DBRS Inc., where he was responsible for clean energy and energy-efficiency financing.
“CleanFund has been the leader in taking C-PACE to nearly $1 billion in total funding since inception of this innovative tool,” said Gutierrez. “Our aim is to extend that several fold as more property owners learn about the advantages of C-PACE.”
C-PACE financing was introduced in California in 2008 as a form of voluntary parcel tax assessment financing to fund qualifying improvements that reduce energy and water usage. C-PACE financing for commercial real estate, which has been adopted in 35 states and the District of Columbia, allows property owners to repay qualified investments for building upgrades and new construction as a line item on the property’s property tax bills.
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