On Tuesday, Nuveen, the global alternative assets manager with $1.2 trillion in managed client assets, announced that it is acquiring Greenworks Lending, a national leader in Commercial Property Assessed Clean Energy (C-PACE) financing. The acquisition gives Nuveen a foothold in the fast emerging clean energy and energy efficiency lending market and will give its clients access to an innovative and attractive clean energy investment. Price and other deal terms were not announced, although the transaction is expected to close in the first half of 2021.
C-PACE lending enables U.S. commercial property owners to access low-cost, long-term financing for energy efficiency, renewable energy and water conservation projects. According to Greenworks, most commercial property types–industrial, hotel/office, retail, mixed use, and multi-family buildings–are eligible for C-PACE financing. Clean energy updates such as these are classified at state level as a public benefit, and can then be financed with no money down and repaid as a benefit assessment on the property tax bill over a term (up to 30 years) matching the useful life of the updates and/or new construction infrastructure.
Greenworks currently provides C-PACE financing in 24 states (including California, New York, Texas, Florida ) and the District of Columbia. The company plans to roll out its product offering in Alaska, New Jersey and Washington state in the near future.
Additionally, Greenworks Lending has played a role in policy development of approved C-PACE legislation in more than 30 states, partnering with the issue advocacy group PACENation, which promotes nationwide expansion of property assessed clean energy legislation.
“Greenworks is a pioneer in developing and scaling C-PACE as a cost-efficient marketplace solution for property owners and municipalities to pursue energy efficiency solutions for their commercial buildings,” said Nuveen CEO Jose Minaya in a comment on the deal. “The company is a triple-win demonstration of doing well by doing right: investors get access to attractive yields, borrowers get a net reduction in operating costs through the utility savings, and the environment benefits too.”
Greenworks’ mission is to reduce the global carbon footprint through attractive investment solutions in commercial and industrial properties, which are the largest real estate users of carbon in the United States.
Nuveen notes that Greenworks’ mission is aligned with one of the key tenets of its own responsible investing platform: reducing the carbon footprint of commercial real estate. This also makes an impressive economic impact, as property improvements are offset by energy cost savings, resulting in a cost-effective means to finance green new construction and property retrofits.
“We founded Greenworks with a mission to combat climate change by scaling clean energy in commercial buildings around the country. C-PACE brings benefits to local businesses, energy security and the environment,” said Greenworks CEO Jessica Bailey. “In Nuveen, we found the ideal firm with a shared philosophy that can expand C-PACE to more property owners, through its diversified investment expertise in private credit, real estate and municipal finance, global reach and 50-year heritage of responsible investing.”