CDPQ, Nuveen Launch Sustainable Commercial Real Estate Financing Joint Venture
The Caisse de dépôt et placement du Québec announced Monday that the $332 billion Quebec pension will partner with Nuveen Green Capital to launch a C$830 million ($600 million) financing program for sustainable commercial real estate development across the U.S.
Specifically, the program will offer Commercial Property Assessed Clean Energy financing, as well as senior bridge and construction financing for sustainable real estate developments.
Since 2014, C-PACE, a U.S.-focused financing mechanism, has allowed building owners to make energy efficiency improvements by using financing to pay for upfront costs, which are then repaid through an assessment on the properties’ tax bill. The structure of C-PACE allows for long-term financing and makes transferability of repayment obligations to new owners easy.
“Developing greener buildings and reducing the carbon footprint of our built environment can create significant value,” said Marc Cormier, executive vice president and head of fixed income at CDPQ, in a statement. “Through this distinctive financing program, we are able to accelerate the implementation of environmentally sound measures for commercial real estate owners and developers.”
CDPQ had approximately $320 billion in assets under management as of December 2023.
Nuveen is one of the largest providers of C-PACE financing in the U.S. According to a statement, the firm had provided 41% of the total C-PACE originations volume in 2023. While it is not a federal program, roughly 40 states have legislation which permits the use of C-PACE financing.
Nuveen, a wholly owned subsidiary of TIAA, will act as the primary sourcing agent for the financing program with CDPQ, according to a statement.
“This program represents another exciting milestone for the C‑PACE industry and Nuveen Green Capital,” said Jessica Bailey, president and CEO of Nuveen Green Capital. “We are thrilled to be working with CDPQ to build this one-stop shop for bridge and construction loans to meet the growing need for commercial real estate financing.”
C-PACE has been used for more than 3,300 commercial real estate projects since 2012, according to nonprofit industry group PACENation.
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