Live from New York, It’s Bayview PACE
By Alejandra Torres
Fred Lee, former Co-CEO of New York City Energy Efficiency Corporation (NYCEEC), is joining Bayview Asset Management, LLC to help lead its newly-minted Commercial PACE program.
A green renaissance is underway in the Big Apple. New York City is leading the charge, through its new PACE program, to develop environmentally-friendly buildings that will help fight climate change and give commercial real estate investors the opportunity to reduce their expenses significantly. At the forefront of this green movement is Bayview PACE, a program that provides Commercial Property Assessed Clean Energy (“C-PACE”) loans in New York and other participating states across the country.
PACE in New York
Led by a team of PACE veterans—including Fred Lee, who will serve as Senior Vice President of Bayview PACE, a division of Silver Hill Funding, LLC, an affiliate of Bayview Asset Management—the availability of this financing solution is slated to make a significant impact in the State of New York and New York City, in particular. “There are so many policy initiatives that will drive the uptake of PACE financing in New York today,” Lee says.
New York’s PACE program, passed into law in 2019 as part of the Climate Mobilization Act in New York City and became effective in 2021, paving the way for a cleaner and greener commercial real estate market.
The PACE program’s goal is simple: reduce carbon emissions by placing carbon caps on buildings larger than 25,000 square feet across New York City. Starting in 2024, Local Law 97 (another mandate part of the Climate Mobilization Act) requires commercial properties to reduce their carbon emissions so that City-wide carbon emissions are reduced by 40 percent by 2030 and 80 percent by 2050. It’s a major task, but one that is already proving to be possible with the availability of cost effective C-PACE financing.
Just this year, the city closed its first and the country’s largest C-PACE financing at $89 million. According to Lee, “there’s going to be a steady flow of both small and large deals with Bayview PACE squarely in the mix.” .
Bayview PACE in Action
With Lee’s expertise, Bayview PACE is positioned to be a market leader in the C-PACE industry, offering favorable financing solutions for different project situations (e.g. new construction, renovation, and rescue capital scenarios) .
One major benefit C-PACE offers commercial real estate investors is the ability to retroactively lock in lower interest rates for construction projects that have been completed within 3 years from the time of the C-PACE financing. This could cover a wide range of improvements, including upgraded HVAC systems, controls, LED lights, insulation, new windows and doors, and solar panels.
Bayview PACE offers borrowers the chance to unlock capital and achieve key objectives, including meeting the Local Law 97 greenhouse gas reduction mandates.
“Bayview’s existing relationships with market participants—lenders, brokers, and real estate owners—is a competitive advantage,” he explains. “We already have the infrastructure and operations necessary to execute PACE transactions quickly and efficiently.”
Bayview PACE intends to offer financing solutions across the country (see PACE eligibility map here) and is particularly excited about New York City thanks to Lee’s previous experience as co-CEO of NYCEEC, the first green local bank in the country. “My biggest accomplishment at NYCEEC was developing, designing, and launching the New York City commercial PACE program,” Lee says. “I look forward to building on my prior relationships and experiences in the PACE ecosystem to help Bayview PACE grow.”
Gearing up for a Cleaner Future
Lee will serve as a subject matter expert on all things C-PACE, both in New York and on a national level. While energy efficiency and greenhouse gas reduction are the focus in New York, in other markets, the focus can be on seismic improvements, water conversation, and after the Covid-19 pandemic, cleaner air filtration systems. “I’m eager to join a talented team to build a robust program in New York City and other markets that helps make buildings healthier, more sustainable, and more energy efficient.”
DISCLAIMER: The information provided herein is intended for informational purposes only. Programs may be cancelled or modified anytime without prior notice. Programs may not be available in all jurisdictions. These materials are intended to provide general information to the reader and each commercial loan is reviewed and underwritten on an individual basis. Bayview PACE, a division of Silver Hill Funding, LLC NMLS# 1564077 www.nmlsconsumeraccess.org, is an affiliate of Bayview Asset Management, LLC. All aforementioned subsidiaries and affiliates are not engaged in rendering legal, accounting, or other professional services. We use reasonable care in providing information but cannot guarantee accuracy or completeness. Information is provided with no warranty express or implied, and all such warranties are expressly disclaimed. We assume no liability for any loss damage or expense from errors or omissions in these materials whether arising in contract, tort, or otherwise.