GREENWORKS LENDING. Our mission is to make clean energy smart business

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2 GREENWORKS LENDING Greenworks Lending is the leading national provider of Commercial PACE financing, investing with building owners to upgrade their commercial properties, drop operating expenses, and become more energy efficient. Our mission is to make clean energy smart business 2 2

3 C-PACE TRANSFORMING ENERGY IMPROVEMENT FINANCE Property Assessed Clean Energy (PACE) is a government financing policy that classifies energy-saving upgrades as a public benefit like a sewer, road extension, etc. This enables 100% of hard and soft project costs to be funded by private capital and repaid via a surcharge on the property tax bill. Payback periods match equipment life (often 20+ years) this makes most projects cash flow positive from day one. 3 3

4 MOST ENERGY AND WATER PROJECTS QUALIFY High efficiency lighting Automated building and HVAC controls Variable speed drives (VSDs) on motors fans and pumps High efficiency chillers, boilers, and furnaces High efficiency hot water heating systems Combustion and burner upgrades Fuel switching (ex. oil to gas conversions) Water conservation Heat recovery and steam traps Building enclosure/envelope improvements Building management systems Renewable energy systems Associated permitting and other soft costs Etc 4 4

5 MOST COMMERCIAL BUILDINGS QUALIFY Financial Requirements Financed amount cannot exceed $3.5M or 35% of property value Total property debt (mortgage + PACE) cannot exceed 95% of property value Not in bankruptcy Meets State s statutory requirements Building Requirements Commercial, Industrial, Non-Profit, Multi-Family >5 Units Does NOT work for residential, government Located within operational PACE municipality Current on property taxes 5

6 C-PACE FINANCING OVERCOMES IMPLEMENTATION BARRIERS IMMEDIATE CASH FLOW 100% financing Long payback period, fixed rate Covers all hard and soft costs FLEXIBLE AND SECURE FOR OWNERS No personal or corporate guarantee Transfers on sale Can be passed through to tenants Preserves borrowing capacity MOST PROJECTS & BUILDINGS QUALIFY Qualify based on property value Funds most energy and water projects All standard commercial property types 6

7 WHY DO OWNERS CHOOSE PACE Non-recourse financing Asset based, rather than credit based, underwriting Can be passed through in many leases As a tax assessment, can receive favorable balance sheet treatment Transfers upon sale of property Cheaper form of financing for CAPEX Fixed rate, long term (often 20 years) financing eliminates interest rate risk 7

8 STATE-BASED LEGISLATION ACTIVE PROGRAMS : California Colorado Connecticut District of Columbia Florida Kentucky Maryland Michigan Missouri New York Ohio Oregon Rhode Island Texas Utah Wisconsin Virginia coming soon 8

9 ECONOMIC DEVELOPMENT NATIONAL DATA, ALL LENDERS (9/31/17) 9

10 FLAVORS OF C-PACE LEGISLATION Defines building type Commercial Industrial Multi-family Defines project eligibility Enables local opt-in process Can requires consent of existing mortgage lenders Can include energy savings requirements Can include underwriting criteria 10

11 KEY LESSONS Statewide standardization is key Open market for multiple lenders is preferable Limited restrictions on underwriting criteria Mortgage lender consent important for market support Program administrator should support designing local program, certifying eligible projects, and program promotion States should work with capital providers to make sure the legal structure of the program is workable for lenders Keep administrative costs low to encourage volume 11

12 CASE STUDIES

13 CASE STUDY: COMFORT INN AND MEDICAL OFFICES Project Need & Solution Commercial office building and hotel on a single parcel in Gaithersburg MD. implementing cost-saving energy efficiency upgrades. Project Type: building envelope, HVAC replacement, LED Lighting Total Project Cost: $ 1,400,000 Money Down: $ 0.00 C-PACE Financing: $ 1,400,000 Term: 20 years Annual Assessment: $ 124,567 Year One Savings $ 34,444 Lifetime Savings: $ 3,174,510 PACE to Value <10% Highlight: Hotel received Choice Hotel s (ComfortINN) highest level certification for sustainability following the improvements. 13

14 CASE STUDY: RETAIL ON MAIN STREET Project Need & Solution Main St. retail shop replaced air conditioners and windows that dated back to The HVAC upgrades and the replacement of more than 1,000 sq.ft. of low R-value glass improved the building s overall energy efficiency year-round. Project Type: HVAC and building envelope (windows) Total Project Cost: $134,408 Money Down: $0.00 C-PACE Financing: $134,408 Term: 20 years Annual Assessment: $12,060 Year One Savings: ($498) Lifetime Savings: $300,704 PACE to Value 10% Legislator Quote: A Downtown business will be able to upgrade his commercial property and take immediate advantage of decreased operating costs, while increasing energy efficiency. Kent County Commissioner, William Short 14

15 CASE STUDY: MULTIFAMILY RE-DEVELOPMENT Project Need & Solution Multifamily property management firm replaced obsolete/end of life boilers in 11 buildings spanning across state/district border of Maryland and D.C. Project Type: Energy efficiency boiler replacement Total Project Cost: $ 4,816,131 Money Down: $ 0.00 C-PACE Financing: $ 4,816,131 Term: 20 years Annual Assessment: $ 420,939 Year One Savings Lifetime Savings: $ 843,258 $ 3,767,263 Contractor View: What C-PACE represents for multifamily property owners is an opportunity to improve NOI for aging properties. PACE to Value <10% John Cain, Director of Energy Services at Boland 15

16 CASE STUDY: MULTI-FAMILY RESIDENTIAL & RETAIL Project Need & Solution Transform a former bank headquarters into a mixed use commercial condo and apartment building consisting of 285 residential units and retail space on the lower levels. Project Type: Solar, high-efficiency lighting, and a microgrid. Total Project Cost: $1,000,000 Money Down: $0.00 C-PACE Financing: $1,000,000 Term: 20 years Annual Assessment: $42,685 Year One Savings: $236,899 Lifetime Savings: $1,907,591 PACE to Value 17% Take-Away: Historic bank building renovated into LEED platinum mixed-use facility. Developer used C-PACE to lower average cost of capital in stack. 16

17 Questions: