Alexandra Cooley
Co-founder and chief investment officer, Nuveen Green Capital
Age: 37
Industry experience: 10 years
C-PACE [Commercial Property Assessed Clean Energy] financing helps commercial property owners pay for building sustainability upgrades that deliver operating cost savings on a repayment timetable that makes sense for their investment timelines. Alexandra Cooley is the co-founder of Darien-based Nuveen Green Capital, which provides C-PACE financing for commercial property owners in three dozen states including Connecticut. Cooley has raised over $1 billion in equity and debt for the public-private funding mechanism, which has benefited notable local projects such as redevelopment of the former Armstrong Rubber office building in New Haven into a 165-room boutique hotel. TIAA subsidiary Nuveen acquired the company in 2021.
Q: How does C-PACE funding address needs for commercial landlords in comparison to traditional financing?
A: C-PACE initially started in 2007 in Berkeley, California. Previously you were required to invest a lot of capital upfront for small but durable operating savings. It’s a classic financing need. If you’re a residential or commercial owner, you tend to sell your property every five to 10 years and some of those upgrades require payback that’s 12 years or more. What C-PACE does is utilize the special assessing powers of the state. We create a special taxing district, which enables the owners to assess themselves and raise the funds for solar and energy efficiency. The commercial C-PACE program became more possible in 2012 at the Connecticut Green Bank. My co-founder [Jessica Bailey] and I met at the Green Bank and built out the first successful C-PACE program in the country, and we spun out and started Greenworks Lending. The firm has grown to $1 billion in originations, and a large chunk of that has occurred in 2022. We’re really at a rapid growth stage in the industry. When we started, there were just a handful of states that had policies, and the focus on ESG (environmental, social and governance) by building owners and investors was just starting. Since 2012, there’s been a tremendous amount of demand for the measures that C-PACE enables.
Q: What’s the scope of a typical C-PACE project?
A: There are really three major uses. One is a single upgrade on a stabilized piece of real estate, and typically that’s solar. We’re putting solar on the roof and the building continues to operate during that time, and that’s 20 percent of the projects. Another 20 percent is what we call retroactive financing: recently completed but not yet stabilized properties. In many states, you are able to have a look-back period of 12 to 36 months, to refinance other sources of capital. That’s another 20 percent. That’s really beneficial to developers and sponsors in a volatile rate environment like the one we’re currently in. And the vast majority, or 60 percent, is where there’s a significant construction component: where the building is not operable during construction, or ground-up new construction. There are so many things that qualify under state policy: boilers, HVAC, sometimes the envelope of the building and sometimes water efficiency and resiliency. C-PACE can provide up to 35 percent of the capital stack. State policies [on what’s covered] is fairly standard from state to state. The things that differ are really resiliency: wildfire risk in California, or hurricanes in Florida.
Q: What range of operating savings can a property owner expect to receive after participating in the program?
A: It runs the gamut depending upon the goals of the sponsor. For new construction and retrofits, it’s really less of an operational savings that the owners are focused on. They’re looking at C-PACE to save overall costs by lowering the cost of capital and increasing the returns on equity, because they’re able to lock in fixed-rate for 20 to 30 years depending upon what they’re installing, and are not subject to volatility in the refinance market.
Q: What does the passage of the Inflation Reduction Act mean for the future of the program and the green economy?
A: We are a mission-driven company. My co-founder and I wanted to have a major impact on the space, and the IRA will reduce emissions by 40 percent by 2030. But more specifically, it puts billions of dollars in tax credits for clean energy that will reduce the cost of the technologies that are C-PACE eligible. Developers will realize savings and they will be able to do more in the buildings. More projects will start to make sense.
Q: What are some examples of recent local projects that have tapped into the program?
A: This one is personal for me. I grew up in Connecticut and the former Armstrong Rubber building has literally been vacant since I was in high school, if not before. We provided $7 million to do solar and battery storage, among other efficiency measures, and this hotel is expected to be the first Passive House-certified hotel in the U.S., and part of the Tapestry by Hilton collection. It shows the power of C-PACE and not only helps green the building, it helped revitalize the community. This has been a vacant property next to the highway becoming a really cool hotel.
Q: What does the change in ownership mean for your firm?
A: Not a lot has changed, and our team has remained largely intact. The entire leadership team has remained and we’ve continued to grow. Nuveen was the majority bond buyer in our [2021] securitization, and it’s almost like a vertical integration strategy. They are a huge commercial real estate investor and we were able to benefit from that expertise, and we are closer to the source of capital and able to receive significant efficiencies in the cost of capital. We’ve more than doubled our loan portfolio since closing on the acquisition.
Cooley’s Five Favorite Restaurants in Connecticut:
- Grano Arso, Chester
- Skappo, New Haven
- Pucket Café, Rocky Hill
- Kawa Ni, Westport
- The Owl, New Preston
