Petros Pace CEO Mansoor Ghori with 111 Wall Street (Petros, Google Maps)

Petros Pace CEO Mansoor Ghori with 111 Wall Street (Petros, Google Maps)

Wall Street nabbed the first C-PACE deal in New York City’s history, two years after the program to finance environmental improvements was passed.

Wafra Capital Partners and Nightingale Properties scored $89 million in C-PACE financing for its 1.2 million square-foot, 25-story office building at 111 Wall Street, according to a release from City Hall.

Austin, Texas-based Petros PACE provided the financing, which was part of a larger $500 million acquisition and construction financing package from a variety of lenders including: SKW Funding, PIMCO, Oaktree Capital and Bain Capital.

C-PACE is a financing tool that can help landlords and building owners pay for energy reduction improvements at a lower interest rate than conventional financing. The 111 Wall Street deal means that C-PACE is finally available in New York City, about two years after it was passed into law.

Wafra Capital Partners and Nightingale Properties plan to use the C-PACE money for renovations, including a new HVAC air conditioning and mechanical-electrical-plumbing systems, according to release from Petros PACE.

“Today, I want to send a clear message to all building owners in our five boroughs — you have a critical financial tool to redesign your properties for energy efficiency and sustainability,” said Mayor Bill De Blasio in a statement released on Wednesday.

The deal was announced on a webinar hosted by NYCEEC, New York City’s PACE loan administrator, but the identities of the project and lender were not disclosed until today.

Petros PACE CEO Mansoor Ghori said the deal had been in the works for four or five months. He said one challenge was getting senior lenders’ consent for C-PACE in the financing package.

“This wasn’t an easy lift for sure,” said Ghori. “But they’ve (senior lenders) now consented to PACE because people are understanding it better.”

Proponents of the program believe C-PACE could play a key role in covering the costs that property owners will incur to comply with Local Law 97, which was passed as part of the Climate Mobilization Act.

Local Law 97 requires most commercial buildings larger than 25,000 square feet to reduce their carbon emissions by 40 percent by 2030 and 80 percent by 2050. Absent any changes to the law, landlords who don’t comply will be on the hook for hefty fines.

Nightingale, led by Elie Schwartz and Simon Singer, and Wafra, a subsidiary of Kuwait’s sovereign wealth fund, acquired the ground lease for $175 million in January 2020. Nightingale and Wafra were originally hunting for a five-year, $860 million loan to finance the property’s renovation.