Nuveen Green Capital Expands C-PACE Platform With CDPQ Partnership

Nuveen Green Capital (NGC), which has emerged as a leader in the commercial property assessed clean energy (C-PACE) lending space over the past decade, is pioneering a new partnership aimed at broadening the scope of the sustainability financing vehicle.

NGC, the clean energy lending arm of Nuveen, announced Monday it has teamed with Canadian global investment group CDPQ to launch a $600 million integrated commercial real estate lending program combining long-term C-PACE financing with senior bridge and construction loans. 

Jonathan Kloos, senior director of lending partnerships and new products at NGC, said the partnership is another crucial step toward creating more acceptance of C-PACE deals by enabling property owners to blend it with senior debt. 

“This solves one of the previous constraints of C-PACE,” Kloos said. “As with any new product that wants to get accepted into a marketplace, there’s a learning curve, and one can be reactive to that opportunity or proactive, and this is our very clear proactive approach to synthesizing and marrying C-PACE plus senior mortgages.”

Kloos said discussions regarding the partnership began in late 2023 with Quebec City-based CDPQ, which was a solid fit due to its past commitment to sustainable investing. He said NGC is initially targeting 20 markets to execute joint offering deals for the initial $600 million investment from CDPQ and will likely be looking to upsize the partnership in 2025.

The initiative with CDPQ adds to NGC’s central focus on C-PACE since forming in 2015 as Greenworks Lending before Nuveen acquired it in early 2021. The Darien, Conn,-based firm, which executed the CRE industry’s first rated C-PACE securitization in 2017, originated more than $800 million of volume in 2023 and is on pace to hit the $1 billionr mark this year, according to Kloos.

Since NGC’s first foray into C-PACE lending, the industry has seen more than $7 billion of financing volume from over 2,300 projects. NGC accounted for 41 percent of the total C-PACE activity in 2023, according to the company.  

“Through this distinctive financing program, we are able to accelerate the implementation of environmentally sound measures for commercial real estate owners and developers,” Marc Cormier, executive vice president and head of fixed income at CDPQ, said in a statement. “We are excited to combine our long-term capital with Nuveen Green Capital’s extensive expertise to offer a sustainable integrated financing solution that fully aligns with CDPQ’s climate strategy and commitment to decarbonize the real economy.”

Jessica Bailey, president and CEO of NGC, said in a statement that working in concert with CDPQ will enable it to create a “one-stop shop for bridge and construction loans” while meeting a “growing need” in CRE financing.

Bailey, who co-founded NGC with Alexandra Cooley, recently played an integral role in expanding the number of eligible C-PACE projects in New York City by working closely with the New York State Research and Development Authority and City Hall to create new guidelines. 

Kloos said New York City is one of the markets NGC and CDPQ is targeting for deals in the platform’s initial rollout. He said the Big Apple “is the single largest market that can benefit from C-PACE given the number of buildings in need of redevelopment as a number of office owners seek to convert aging properties into residential or other uses.”

As NGC and CDPQ prepare to tackle a number of loans together, Kloos stressed that the ultimate impact will go beyond the numbers and lift the entire C-PACE sector.

“With the bigger broader impact of C-PACE and environmental-minded investing, I think that together we’ll be making a very significant impact on how capital is deployed within our industry with a mind towards being responsible stewards of our environment and in the cities in which we live,” Kloos said. “We’re very excited about the broader impact that we can have as a leading indicator of what can be done within commercial real estate finance, especially when you have two like-minded institutions coming together.”

Andrew Coen can be reached at acoen@commercialobserver.com