TX PACE in Practice:
Is My Project a Good Fit for TX PACE?
An educational series from Texas PACE Authority exploring common questions, project structures,
market trends, and real-world applications of TX-PACE financing across Texas.
Is My Project a Good Fit for TX-PACE?
Last year, a historic hotel redevelopment in San Antonio used TX-PACE to help finance HVAC, lighting, water efficiency, and building envelope improvements. It's one of hundreds of commercial projects across Texas using TX-PACE to strengthen their capital stack while investing in long-term building performance.
One of the first questions we hear from property owners, developers, contractors, and lenders is simple:
"Is my project a good fit for TX-PACE?"
The answer depends on your property, the planned improvements, and your overall financing strategy. The good news is that many projects qualify in ways owners don't initially expect, and evaluating eligibility is often easier than people think.
Today's commercial real estate projects face rising construction costs, higher interest rates, increasing insurance premiums, and tighter capital stacks. As developers look for ways to close financing gaps without sacrificing project scope or tying up additional equity, many are discovering that TX-PACE can provide a flexible source of long-term financing.
TX-PACE finances eligible energy efficiency, water conservation, resiliency, and distributed generation improvements made to commercial properties. Because repayment can be extended up to the useful life of the improvements, TX-PACE often helps reduce annual debt service while preserving capital for other project needs.
Could My Project Be Eligible?
Your project may be a good fit for TX-PACE if it:
- Is a commercial, industrial, nonprofit, agricultural, or multifamily property
- Includes energy efficiency, water conservation, resiliency, or distributed generation improvements
- Is new construction, renovation, adaptive reuse, or a major building system replacement
- Could benefit from additional long-term financing within the capital stack
Eligible improvements commonly include:
- HVAC systems
- Roofing
- Lighting
- Windows and doors
- Insulation
- Building automation and controls
- Water conservation measures
- Solar energy systems
Many associated soft costs—including engineering, design, legal expenses, permitting, and energy audits—may also qualify.
Every project is unique, and not every improvement or expense is eligible. That's why we encourage property owners and developers to have a conversation with our team early in the planning process, before financing decisions are finalized.
More Than Just New Construction
One of the biggest misconceptions about TX-PACE is that it's only for new construction or large, high-profile developments. In reality, the program has been successfully used across a wide range of commercial property types and project sizes throughout Texas.
TX-PACE has helped finance:
- Historic rehabilitations
- Adaptive reuse projects
- Hospitality developments
- Multifamily communities
- Office repositioning projects
- Industrial facilities
- Healthcare properties
- Mixed-use developments
Recent Examples
- InterContinental Hotel II – San Antonio
TX-PACE financed HVAC upgrades, lighting improvements, water efficiency measures, and building envelope improvements as part of the property's redevelopment. - Historic Grocery Store Redevelopment – Waco
This adaptive reuse project incorporated roofing, HVAC, solar energy, and water efficiency improvements through TX-PACE financing.
We're also seeing growing interest from community redevelopment projects, adaptive reuse developments, and investments in low-to-moderate-income communities. These projects often use TX-PACE to strengthen the capital stack while improving building performance and supporting long-term investment in their communities.
It's About More Than Eligibility
In many cases, the better question isn't simply whether a project qualifies for TX-PACE. It's “How can TX-PACE fit into the overall financing strategy?”
Projects that already include major building system upgrades are often strong candidates because the improvements are already part of the project budget. Rather than increasing traditional debt or requiring additional equity, TX-PACE can finance many of those eligible costs with long-term, fixed-rate capital that aligns repayment with the useful life of the improvements.
Whether you're looking to preserve equity, improve project cash flow, or fill a financing gap, TX-PACE may provide another financing tool worth considering.
Let's Start the Conversation
Every project is different, and eligibility depends on the planned improvements, financing structure, and local program requirements.
Whether you're considering a new development, renovation, adaptive reuse project, historic rehabilitation, or major building system upgrade, our team can help evaluate whether TX-PACE is a good fit, often before you've finalized your financing.
The earlier we become part of the conversation, the more opportunities we have to help identify eligible improvements, coordinate with your financing team, and position your project for success.
TX-PACE Takeaway
You don't need to know whether your project qualifies before reaching out.
If your project includes significant building improvements, or you're looking for ways to strengthen your capital stack, the conversation is worth having. Our team can help evaluate your project, answer questions, and identify opportunities to incorporate TX-PACE into your financing strategy.
About Texas PACE Authority
Texas PACE Authority (TPA) is a nonprofit organization and the leading administrator of TX-PACE programs, serving more than 113 cities and counties across Texas. TPA partners with local governments, property owners, developers, and capital providers to facilitate financing for energy efficiency, water conservation, resiliency, and distributed generation improvements in commercial properties. Through program administration, technical expertise, and collaborative project support, TPA helps make high-performance building investments more accessible throughout Texas.