The dynamics surrounding traditional capital flows into the U.S. commercial real estate market are undergoing a significant transformation, witnessing a decline of around 38.6 percent in the first half of 2023 compared with the same period in 2022. Diminishing access to traditional capital can largely be attributed to tighter credit conditions and elevated refinancing needs, which have resulted in decreased lender activity and a much more competitive funding landscape.

In response to shifting market conditions, many developers and owners are turning to sustainable or “green” financing options — capital that is specifically allocated for sustainable projects and investments. In today’s complex market environment, even developers historically less focused on sustainability are embracing financing tools such as C-PACE and green bonds due to the accessible, adaptable nature of these credit sources. In recent years, the market value of green financing has witnessed exponen