Making Eco-Positive, Resilience-Based Improvements to Your Self-Storage Facility Using CPACE Financing

As a self-storage operator, you’re always looking for ways to improve your facility, whether it’s increasing efficiency, boosting customer value or reducing operating costs. A growing trend in the industry is to focus on “green” updates that make the business more energy-efficient and appealing to eco-conscious customers. But how do you finance that work?

One option that’s gaining popularity is CPACE (Commercial Property Assessed Clean Energy), a government-backed program that allows you to fund a variety of improvements with minimal upfront costs. It was designed to help property owners pay for renewable-energy solutions like solar panels that can make their buildings more sustainable and cost-effective. Its applications have evolved to cover a broad range of innovations including upgraded insulation and stormwater-management systems, to name a few.

The key benefit of CPACE financing is you repay the debt through your property taxes over several years instead of reaching into your own pocket, making it an affordable way to modernize and expand. The loan stays with the property, not you personally, which means you aren’t required to provide a personal guarantee for repaying the loan. There’s also no need to worry about your credit score impacting your ability to qualify.

This may sound too good to be true, leaving you to wonder if there’s a catch. There isn’t! Read on to learn more.

Why Consider CPACE?

CPACE financing can be a game-changer for your self-storage business. Here’s why:

Flexibility. The funding can be used for a variety of upgrades that improve the energy efficiency of your property. For example, you could finance resilience projects that protect your property from extreme weather events. You can also install energy-efficient systems, expand your space or update existing structures to better serve customers.

Lower upfront costs. A large down payment isn’t needed on a CPACE loan because it’s structured to be repaid through a property-tax assessment over time. This means the financial burden is spread out.

No personal guarantees. Since the loan is tied to your self-storage property rather than your personal credit, there’s no need for a personal guarantee. This makes it a safer, lower-risk option for facility owners.

No impact on credit. Because this financing is tied to your property instead of your personal finances, it doesn’t affect your credit score or business credit. This means it won’t interfere with your ability to secure additional financing in the future.

Long-term, low-cost payments. CPACE loans offer long repayment terms, typically between 10 and 30 years, with competitive interest rates. This makes borrowing more affordable compared to other financing options.

Increased property value. Many CPACE improvements can reduce operating costs, boost your net income and increase the value of your self-storage facility.

Customer draw. Sustainability is becoming increasingly important for businesses, so demonstrating your commitment to eco-friendly practices can help attract new customers and set your self-storage facility apart from competition. Your tenants may even be willing to pay a premium for green options.

The Application Process

Getting CPACE financing for a self-storage facility is relatively simple, however, the program isn’t available in every state. Your first step is confirm if it’s offered in your state and whether your self-storage property qualifies. If it does, identify the upgrades you want to make and the estimated costs. The more specific your project, the easier the application process will be.

Partner with a lender who’s experienced with CPACE and can guide you through your options. They’ll review your application and determine the loan terms. Once the financing is approved, you can begin your improvements, using the loan to cover expenses.

The Power of Green!

CPACE financing is a powerful tool you can use to make energy-efficient, resilience-focused improvements to your self-storage properties. With flexible financing terms, low- interest rates and no personal guarantees, it’s an affordable, low-risk option for upgrading without breaking the bank.

And the benefits aren’t just financial! By making your self-storage facilities more environmentally friendly, you can attract more customers and increase your property value in the long run. By embracing CPACE, you’re investing in your business future, finding a more sustainable yet profitable way to grow.

Tyler Peterson is senior managing director of acquisitions at Citadel Development Partners, which specializes in self-storage and light-industrial projects. He has five years of experience in real estate acquisitions, dispositions and investment strategies, having closed more than $160 million in transactions through 60-plus deals across 17 states. He owns multiple single-tenant, net-lease and self-storage assets with a total portfolio value of nearly $5 million. To reach him, email [email protected].

About the Author

Tyler Peterson

Tyler Peterson is a senior managing director of acquisitions at Citadel Development Partners, which specializes in self-storage and light-industrial projects. He has five years of real estate experience in acquisitions, dispositions and investment strategies. He’s closed more than $160 million in self-storage and industrial transactions across 60-plus deals in 17 states. He owns multiple single-tenant, net-lease and self-storage assets with a total portfolio value of nearly $5 million. To reach him, email [email protected].

See more from Tyler Peterson

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