Structured Finance Associates was founded in 2010 to provide smart financial solutions for real estate property owners. We provide financing that allows owners to obtain the energy efficiency capital expenditures they want for their buildings without spending a cent of the capital they need to continue grow their business.
Lowering your energy expenses and increasing your NOI is easier than you ever thought possible. It's our job to help you get your projects financed so that you can reap the rewards of a more efficient, profitable business. Every deal we do is immediately cash flow positive - let us show you how much we can save you.
We're a nationwide firm with offices in California, Connecticut and Washington DC.
We make energy efficiency effortless.
the new you:
master of the bottom line
PACE is energy financing for a new era.
Property assessed clean energy (PACE) is a municipally-administrated program that encourages property owners to upgrade their structures to make them more energy and water efficient. First-passed in California in 2008, PACE programs are now law in 31 states, with many more programs on the way.
Interested in learning more about PACE and how we can help you? Pick the property to the right that best describes you, check out the details below or get in contact with us.
• How does PACE fit in with my other financing options?
The graphic on the left side below represents the traditional capital stack for commercial, industrial and hotel properties. The percentages may be changed a bit given the aggressiveness of the first mortgage market but the following generally holds true for most properties: owners find themselves forced into using equity to finance new capital expenditures. This means less distributed cash flow for investors (dilution), and fewer funds that can be used to acquire additional projects.
You can see on the right graphic that PACE acts as a form of “preferred stock” within the capital stack. It is non-recourse, 100% financing that doesn’t force you, the property owner, to use equity to improve the value of your property. That translates into greater cash flow which be utilized for distributions, acquisitions or whatever else your business needs.
• What about lender consent?
PACE is a tax assessment and is senior to all private liens. It is pari pasu with property taxes. We require that the mortgage lender consent to the PACE financing. In summary, a tax assessment is different mechanically than mortgage debt. In a default the entire amount of the mortgage debt accelerates including principal and interest. Should a property default on their taxes, only that year’s payment associated with the PACE financing accelerates. The result is that the property has greater cash flow from the improvements and a larger number of assets, improvements, which increase the value of the property.
We have been successful in receiving lender consents from a number of major banks and insurance companies. If you have questions about your lender, who we’ve worked with in the past or how to get the ball rolling, contact us.
• How does the accounting work?
PACE is off-balance sheet financing. We have prepared a white paper the goes through the logic as to why this is the case and how other public companies and their auditors have treated PACE and assessment financing. Please contact us and we’d be happy to send it along and walk you through the particulars.
• How does PACE work with the lease structure of my property?
PACE shines in a couple of different types of properties: Hotels and properties with gross leases. In these situations any cost savings from reduced energy use flows directly to the property's bottom line. Almost all the projects we see have energy savings that exceed the cost of the PACE assessment. You will directly improve your bottom line with no out of pocket expense.
Modified gross leases take a little more homework. Usually the increase in property taxes, the PACE assessment, may be passed-through to your tenants (which is the case with a triple net leasing structures). If that sounds like something your tenants might not love, remember that this increase in taxes for the tenant is offset by a dramatic reduction in energy costs. Your tenant will see their overall cost of occupancy decrease. You will improve your property, at no cost, and position your property as the low occupancy cost leader in the market. You’ll also provide tenants with a great incentive to renew, and should they vacate, you’ll find new tenants more easily.
Getting started with PACE is easier than ever.
Is PACE financing available for your property?
We require 4 pieces of information to determine property eligibility for PACE:
Normally, within 2 to 3 business days we can tell you whether PACE financing is available and whether Structured Finance is able to provide the financing subject to final credit approval and market conditions. Please note that Structured Finance’s minimum transaction size is $250,000.
Yes, you want to improve your property. Yes, you want to utilize PACE and have no out of pocket costs. Yes, you want to improve your cash flow. But, you're already too busy. You don’t want to mess with it and the to-do list is too long for your existing employees already.
Our focus is getting things done. Structured Finance is hands-on and we take you through the entire process.
• The owner’s name and contact info
• The address and type of property
• What's the approximate dollar amount of the improvements
• What's the size of the property’s mortgage debt/who is the lender
What improvements do you want to make?
Normally a property owner hires an energy consultant to determine the various ways you can improve your property. (The cost of this consultant can be included in the PACE financing.) You then pick from the menu of opportunities and then proceed to get bids for the improvements.
If you already know what you want then you tell us what you want to do and what the cost is.
The next steps are on us.
Once the improvements are set and you settle on your contractor(s) then Structured Finance goes through a more formal underwriting of your project which normally takes approximately 5 to 7 business days. We also speak with your lender, with your permission, to explain and get the lender consent from your lender.
The final step is documentation and closing. Please note that the documentation is standardized and there is no negotiation. This helps to speed up the process and minimize costs.
Our expertise gets deals done.
In November of 2013 SFA partnered with Hilton Universal City Walk to finance the largest PACE assessment ever. At $7 million the deal financed a complete renovation of the hotel, which installed a variety of energy and water-saving measures from new HVAC fan motors to window tinting, low-flow shower heads and LED lighting.
We're experienced in working with deals of all sizes and are ready to help make sure that your efficiency retrofit, like Hilton's, allows you to get more out of your building than ever before.
total cost of improvements
total year 1 savings
total property value increase
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