CleanFund, one of the nation’s largest providers of commercial property assessed clean energy (C-PACE) financing, returned to the Inc. 5000 list of fast-growing U.S. private companies for a second time.
Sausalito-based CleanFund had 1,235 percent three-year revenue growth (to $5.7 million), which is the main requirement for the annual ranking, putting it at No. 405. That's down from No. 331 last year. CleanFund also ranked No. 20 among financial-services companies on Inc. magazine's list.
The company employs 30 and plans 15 more hires this year, according to Woolsey McKernon, senior vice president and chief revenue officer.
CleanFund’s business model of funding environmentally friendly facility upgrades is helpful in attracting talent to sustain growth, McKernon said.
“Today’s young, urban employees care more than ever about the environment and working for an organization that is making real environmental impact every day,” he said. “Our recruiting job at CleanFund couldn’t be easier, being a mission-driven organization at the crux of financial innovation to address climate change.”
The company mission to “increase (commercial property) value and decrease environmental impact” also helps with employee retention, McKernon said.
“… hiring those that believe in it is the purest form of motivation,” he said.
CleanFund started a year after C-PACE financing was introduced in California in 2008. It is a form of voluntary parcel-tax assessment financing that pays for certain commercial-property improvements that reduce energy and water usage and shore up structures from seismic events. Payments are made on the property-tax bill. C-PACE has been adopted in 34 states and the District of Columbia.
Unlike residential PACE financing on single-family homes, mortgage lenders on prospective C-PACE properties provide approval of each transaction.
This past spring, San Rafael-based Seagate Properties inked 30-year C-PACE financing through CleanFund for upgrades to two Marin office buildings.
In July, CleanFund announced it closed what’s described as the industry’s first securitization backed exclusively by C-PACE assessments issued pursuant to rule 144A under the Securities Act of 1933. It is also thought to be the largest and highest-rated C-PACE securitization of any kind.
A single $103 million, AAA-rated note was issued in connection with the transaction, structured by Credit Suisse. The securities are backed by $115 million of C-PACE assessments on 82 properties in six Western, Midwestern and Eastern states.
“Tapping the public markets should open the door for follow-on transactions that bring more investors to our industry and provide our customers even more competitive and robust financing options for office, retail, industrial, multi-family and other commercial property,” said CleanFund CEO Greg Saunders in a statement.
CleanFund in 2011 structured the first privately financed C-PACE transaction then three years later executed the first unrated C-PACE securitization.
What the company is watching for as it grows quickly is whether its customer service stays at “stellar” levels, McKernon said. That can lead to deals on entire real estate portfolios and referrals to similar investors, he said.
Of the 10 traits common to entrepreneurs identified in a Gallup/Inc. Survey of the Inc. 5000 companies, “confidence” best describes a small startup like CleanFund in an emerging industry, according to McKernon.
Contact Jeff Quackenbush at firstname.lastname@example.org or 707-521-4256.