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— Property Management Quarterly — April 2016
M
ost property owners would
like to see their energy-
efficiency standards increase
while watching the cost of
maintaining their property
decrease. Programs such as Commer-
cial Property Assessed Clean Energy
and Global Real Estate Sustainability
Benchmark provide an effective way
for potential investors and property
owners to analyze energy efficiency
and assess the business case for sus-
tainability in commercial real estate.
The Colorado Energy Office launched
CoPACE in December. In just over three
months, the program has $50 million
worth of PACE financing projects in the
pipeline across the Centennial State.
The program is an innovative way for
assisting property owners in com-
pleting energy efficiency, renewable
energy and other clean energy building
improvements. Further, the program
provides a new tool for developers that
increases the efficiency of their project
and boosts their return on investments.
“Until the inception of PACE, inves-
tors and building owners never had a
real incentive to make robust energy-
efficiency upgrades for their buildings,
and investors have had no real reason
to exceed municipal energy codes,” said
Joel Poppert, Colorado Market Leader,
PACE Equity LLC. “Regardless of the
situation, the ultimate benefit is that in
each and every circumstance, all stake-
holders win, and our building stock
gets a serious energy-efficiency uptick.”
State and local governments sponsor
PACE financing to create jobs, promote
economic development and protect the
environment.To get involved, projects
must be located in counties that have
opted to participate in the program. In
Colorado, Boulder County has opted-in
and several other
counties around the
state have indicated
that they plan to
participate. Inter-
ested property own-
ers choose to receive
long-term (up to
20-year) financing
for as much as 100
percent of the cost
of these improve-
ments.This arrange-
ment spreads the
cost of clean energy
improvements
over a longer period than could be
obtained with traditional debt financ-
ing. Property owners are free to arrange
financing directly with one of the listed
capital providers or to bring their own
capital provider to purchase the Colo-
rado CoPACE assessment (i.e., fund the
project).
“For many stakeholders, the ultimate
goal of PACE is to encourage significant
increases in the energy efficiency of the
built environment,” Poppert said. “The
brilliance of CPACE is that it achieves
dramatic energy efficiency upgrades all
while providing an incredible return on
investment to their projects or whole
portfolios.”
Poppert will join representatives from
Microgrid Energy, Sustainable Real
Estate Solutions and the Colorado Ener-
gy Office to review the basics of the
CoPACE program at U.S. Green Building
Council Colorado’s Rocky Mountain
Green conference April 21 and 22.The
panel will assess the development of
the CPACE program, program rules and
eligibility criteria, key stakeholders,
financing details and how the green
building community can benefit from
the program.
USGBC’s sister organization, the
Green Business Certification Inc.,
acquired the Global Real Estate Sus-
tainability Benchmark in October 2014.
GRESB is an industry-driven organiza-
tion committed to assessing the sus-
tainability performance of real estate
portfolios around the globe.While
LEED is the measure of an asset’s per-
formance, GRESB is the measure of
a real estate company or portfolio’s
performance.The implementation of
GRESB is a response to large inves-
tors who continue to call for more
robust sustainability analytics, a desire
founded in research that continues to
tie sustainability to higher returns and
performance.
“The worlds of real estate financ-
ing and green building design and
construction have historically been
fairly oblivious of each other. But this is
changing – hence GRESB,” said Stepha-
nie Barr, LEEDAP BD+C, research asso-
ciate and projects manager with Insti-
tute for the Built Environment. “Inves-
tors need clear, quantitative metrics in
order to integrate ESG factors into their
analytics.They also need a standard
benchmark in order to make apples to
apples comparisons.”
Recently, investors also want the
companies and funds that they invest
in to show what these investments do
when it comes to environmental, social
and governance issues.The amount of
capital that has an interest in ESG data
on real estate investment trusts and
property funds is significant.
“Sustainability metrics have become
a proxy of quality for a real estate
asset/investment,” Barr said. “If a REIT
is tracking higher-order metrics like
sustainability, that means they have
their house in order and they are a firm
to trust.”
Barr and Josie Plaut from the Institute
for the Built Environment also will join
the Rocky Mountain Green dialogue
and will explore the requirements of
GRESB reporting and the relevancy
to those in property management,
development, design, construction and
investment.They will evaluate a case
study of a large REIT’s experience com-
pleting the survey, their achievement of
the Green Star designation from GRESB,
and the impact this activity has had on
their assets, company and investors.
s
Patti Mason
Executive director,
USGBC Colorado,
Denver
PACE:
Property Assessed Clean
Energy program
CPACE:
Commercial Property
Assessed Clean Energy program
CoPACE:
The Colorado Com-
mercial Property Assessed Clean
Energy program
The Global Real Estate Sustainability
Benchmark assesses the sustainability
performance of real estate portfolios. The
program was implemented in response to
calls from investors for more robust sus-
tainability analytics.
