Delivering on Both Developer and Tenant Priorities

This blog was originally posted by PACE Equity.

The priorities of developers and tenants may not have always been in sync in the past. Developers need to focus on strong returns, especially challenging in the current economic climate. Tenants seek healthy, efficient & comfortable spaces to live and work. According to the commercial real estate publication Commercial Observer, demands of tenants and occupants are often ahead of what developers are delivering. For example, the pursuit of energy efficiency by developers lags behind the demands of tenants who are willing to pay premiums for the right spaces. “Renters now explicitly say they are willing to pay more to live in apartment buildings with sustainable design features, from energy-saving appliances to bike rooms, according to the latest survey from the National Multifamily Housing Council (NMHC).”

  • Tenants want healthy & green environments, fueled by the pandemic and the coming-of-age Millennials and Gen Zers.
  • Developers are thinking about rising fuel prices, the specter of increased building performance standards and the eternal quest for project returns.

Solving for both of these priorities means constructing high performance buildings that deliver a great IRR. It means identifying the convergence of low carbon building design and the financial incentives to do it. The solution that can deliver on both is here: CIRRUS™ Low Carbon from PACE Equity.

Simply put, CIRRUS Low Carbon offers lower rates for lower carbon. Reduced PACE financing rates are available for developers and owners who meet the CIRRUS Low Carbon design specification. The specification was developed from a partnership between PACE Equity and New Buildings Institute (NBI), a non-profit driving better energy performance in buildings to make them better for people and the environment.

The specification pushes energy efficiency to ASHRAE 90.1-2019 standards which is a strong step toward efficiency and healthy spaces. The financing rate is reduced by a meaningful amount which drives not just break-even economics, but highly motivating, financially beneficial economics.

Can we get alignment between tenant/occupant priorities and developer/owner priorities? Yes, in the form of CIRRUS Low Carbon with lower rates for lower carbon. Plus the promotion package gives you status as a national sustainability leader.