Oakland Project Secures $10M PACE Financing, Largest Yet For Multifamily New Construction
A multifamily project at 1919 Market St. in Oakland has received $10M in Commercial-Property Assessed Clean Energy financing, the largest such funding to date in the U.S. for a new construction multifamily project.
K2 Clean Energy Capital, an originator and developer of C-PACE financing projects, closed on financing for the 102-unit project being developed by oWow, which builds macro-unit projects with efficiently designed and built apartments that allow residents a more affordable housing option.
"We are excited to see how PACE provided almost 20% of the capital stack and reduced the overall cost of capital," K2 Clean Energy Capital co-founder and Managing Director Stephen Tsu said in a statement.
PACE promotes energy-efficient building technologies. C-PACE offers nonrecourse financing secured through a special assessment on property taxes. The financing for 1919 Market St. will help pay for roofing and insulation, HVAC systems, LED lighting, water efficiency and seismic measures and help the project toward the goal of receiving LEED Silver or Gold certification.
The Oakland project will have two- to four-room live/work units and flexible outdoor event space. It involves the conversion of an existing commercial and industrial site with 70% new construction and 30% reuse and infill of the structural concrete frame.
"Since we started on the 1919 Market project, construction costs have risen over 50%. While we could have given up or built expensive 1 bedroom lofts, we never gave up on the mission of building innovative below-market homes that enable locals to stay local, where families and individuals can not only live but self-sustain themselves by having their business in their home," oWow CEO Danny Haber said in a statement. "PACE financing was a critical part of this project's capital stack and enabled us to incorporate green technologies that will improve the energy efficiency of the building."
Haber said oWow is open to looking at PACE financing as a part of future projects. He said the company is aiming to create sustainable buildings that are LEED Gold and energy-efficient, which goes hand in hand with the goal of PACE financing.