Ares Fuels Green Building Boom with $300M

Ares Management is injecting up to $300 million into Clearwater PACE, a subsidiary of AXCS Capital, to bolster investments in commercial property energy efficiency. This capital commitment will enable Clearwater to expand its financing for upgrades through Commercial Property Assessed Clean Energy (C-PACE) programs.

These state-sponsored programs facilitate low-cost funding for owners undertaking projects such as water conservation, energy efficiency, and renewable energy installations. Typically, C-PACE financing is repaid via a special assessment on property tax bills, creating a secured instrument that can be utilized for new construction, renovations, and recapitalizations.

Clearwater aims to deploy the entirety of the Ares-funded capital, which ranges from $40 million to $50 million per project, by the close of this year. The financing is intended for properties in approximately 40 states and the District of Columbia, with a particular focus on California and Florida.

Ares's alternative credit group, managing roughly $48 billion, facilitated this investment. The firm's property-lending group is actively involved in debt investments for commercial real estate. Meanwhile, AXCS Capital, backed by Conversant Capital, offers nationwide real estate financing and management services.

This move comes as property owners increasingly seek private nonbank lenders, a trend Moody's Ratings has flagged for potential private-credit risks. Higher interest rates are anticipated to drive more borrowers toward such providers in the coming years.