Achieve the full asking price for your asset
The market value of a property is typically discounted when the key infrastructure is at (or past) its useful life.
The valuation of any property is only fully understood at the point of sale, and any absence of capital investment, over the long-term, shows up as either significant capital expenditure for the current owners or as a discount against the value of the property at the point of sale.
It’s likely that your asset is carrying a hidden discount that will only become apparent at the point of sale when due diligence is conducted. At this point, any concerns the future owners have about capital expenditure on major building systems — like roofs, mechanical equipment, and electrical systems — will be reflected in the sale price.
One of the advantages of a C-PACE project is to spread the cost of capital investment over the useful life of the improvement. This means that the cost can be passed from one owner to the next, ensuring that each owner only pays for the benefit of an asset for the period that they own the asset. The best way to preserve asset value and avoid significant capital expenditure that benefits future owners is to use a C-PACE loan to fund capital investment with long-term, fixed-rate money.
If your hold strategy suggests the disposal of a property in the near-term, it's worth comparing the zero-money-down outlay of a C-PACE energy efficient retrofit to the sale discount that you may be forced to give against your target value due to old or outdated building systems.
If you are interested in preserving your asset value, we can expertly show you how to finance capital expenditure through energy savings and avoid a discount against target valuation during the transaction. To learn more, contact us for an overview.