A joint venture behind two Brooklyn film studio projects has closed a $156M deal that represents the biggest commercial property assessed clean energy loan on record in the state.
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Full-service developer Bungalow Projects and investor Bain Capital made a splash last year when they announced their intentions to build two film and television studios in Brooklyn. Even in a moment where existing studios have struggled to find tenants for similar space, the joint venture has scored a huge clean energy loan to fund its project.
CounterpointeSRE, a MassMutual portfolio company that focuses on sustainable lending, has signed to lend $156M in C-PACE financing to Bain and Bungalow’s development, known as Echelon Studios.
“This financing demonstrates both CounterpointeSRE’s commitment to advancing sustainable development and the growing comfort of sophisticated institutional capital utilizing C-PACE as a financing tool,” CounterpointeSRE CEO Eric Alini said in a statement.
The C-PACE loan is split into two pieces to finance a pair of film and television studios the joint venture has planned.
The plan for the studios is to have 10 purpose-built soundstages across the two developments, plus on-site power generation that will help the buildings meet New York’s definition of an ultra-low-energy building.
The first $88M loan is for a 300K SF space with six soundstages at 242 Seigel St. in Bushwick. The studio has an alternative address of 215 Moore St., a CounterpointeSRE spokesperson confirmed to Bisnow.
The second is a $68M loan for Bain and Bungalow’s second project, which would have four soundstages spanning about 155K SF at 63 Ferris St. in Red Hook, with an alternative address of 176 Dikeman St.
Bain and Bungalow have also secured $148M from Farallon Capital Management for the developments, according to a release, which says the combined investments now reach $304M.
C-PACE loans have low interest rates and no requirements for deposits or down payments, as long as the developments or upgrades are geared toward sustainability at the property. They haven't been widely used in New York because of their onerous terms and conditions.
But updates to New York’s C-PACE guidelines, published in October 2024, have made it easier for developers and landlords to access.
The funding mechanism could previously only be used for green retrofits or building improvements rather than ground leases or new construction, and it came with a requirement that every dollar of the loan had to generate at least a dollar of energy savings.
But C-PACE dollars can now be used for up to 30% of a project’s construction costs for low-carbon buildings, and they can be used for ground leases. The guidelines also removed the savings-to-investment ratio for new buildings.
“If you think you know C-PACE, think again,” Laura Rapaport, CEO and founder of C-PACE lender North Bridge, told Bisnow in an email Monday. “The Echelon Studios financing is a clear signal to the market that C-PACE can now be used meaningfully within institutional capital stacks — and for anyone who looked at the program in the past, it’s time to take another look.”
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