ESG & C-Pace Report 2024

Publishing date: 1 February 2024

REC USA’s 2024 ESG & C-Pace special report will be published in the February issue and sent to all subscribers in print and digital form, with all content to sit on the website and LinkedIn indefinitely.

Copies will also be made available to delegates at MIPIM 2024.

ESG Rising

The US commercial real estate debt markets are poised to embrace a shift toward sustainable principles, with a greater emphasis on environmental, social and governance issues. REC USA’s ESG report will look at this rapidly evolving part of the market through the following lens:

• Who will be the green giants of the commercial real estate lending world?
• How do you measure the social impact of your lending portfolio?
• What are ways to align your lending strategy with your company’s broader governance principles?
• How to benchmark and report the impact of your lending strategy.

Across the commercial real estate industry, there is a keen awareness of the importance of environmental, social and governance factors when buying, building, or owning properties. The covid pandemic has intensified the industry’s focus on ensuring real estate meets fast-evolving standards of sustainability, relating to an asset’s impact on the environment and wider society.

In the finance part of the industry, the role lenders can play to promote ESG is becoming more apparent. As borrowers and investors in debt strategies demand finance that incorporates ESG performance, lenders are responding by crafting sustainable lending frameworks, ESG-linked loan products, and by adopting strategies which focus on assets which meet, or are on the way to meeting, sustainable standards.

The report will examine the sustainability strategies lenders are adopting, investigate innovation in the field of ESG finance, and delve into how decision-makers in the property debt market can positively influence the ESG performance of property assets.  Service providers, including debt advisors and law firms, explain how they are adapting to the changing demands of borrowers and lenders.

C-PACE

Cities and municipalities are putting into place legislation which will require property owners to upgrade assets to more stringent environmental standards. And as this is happening, C-PACE lenders are working with sponsors to finance both new and retroactive sustainability upgrades. The report will address:

• How does C-PACE work? Where does it sit in the capital stack?
• What are the best uses for C-PACE? What can C-PACE not be used for?
• Where does C-PACE financing fit with broader trends toward green lending, including green bonds?
• What is the cost of capital for a C-PACE loan compared to a traditional senior mortgage?
• Is there greater lender and borrower understanding of C-PACE financing?
• What comes next? How will C-PACE evolve?