BuildForward Capital Launches to Fund Energy Efficient Construction in New York City
BuildForward Capital LLC announced its launch of operations today, financing deeply energy efficient construction projects in the under-$5 million loan market. BuildForward has created a unique, crowdfunded lending platform that allows individuals and institutions to lend directly to borrowers who seek to make radical improvement to the energy footprint of their buildings.
Melissa Ruttner, President of BuildForward, said, “At BuildForward, our mission is to incentivize the use of deeply energy efficient building principles in new construction and retrofit projects. Deep energy efficiency methodologies, such as Passive House and others, have been shown to reduce the energy use of buildings by as much as 90%. By providing low-cost origination, structuring and underwriting services, along with energy-efficiency design and project management expertise, BuildForward is able to deliver a deeply energy-efficient building, at attractive risk-adjusted interest rates to its lenders and its borrowers.”
An innovative feature of BuildForward’s platform is that it allows individual lenders to choose the loans and projects they wish to participate in directly. Ms. Ruttner stated, “As each project is structured as an individual LLC, risk is not commingled across projects. Lenders will participate in each project based on its own energy efficiency and financial merits.” BuildForward addresses a segment that is sorely underserved in today’s market – that of construction loans for single-family and small multi-family buildings. “Without the availability of this loan product, many energy efficiency retrofits could not be completed. Lenders in the BuildForward structure are having an immediate impact on the energy footprint of New York City real estate.”
BuildForward anticipates negotiated rates on the construction loans to converge in the 6-8% range. Ms. Ruttner continued, “As loans are secured with the underlying real estate as collateral, we believe the risk return profile of this product is very attractive to lenders.” Borrowers will also find that BuildForward’s lean corporate structure allows for a loan approval and underwriting process that is faster and more flexible than traditional banks. “Our goal is to get these projects done, while appropriately mitigating risk to our lenders.”
At launch, BuildForward is pleased to announce a key partnership with Green City Force (named NYC’s Most Innovative Non-Profit for 2013 by the NYC Mayor’s Office – www.greencityforce.org). BuildForward will develop its community outreach and job growth initiatives by working with GCF to integrate energy efficiency techniques into the GCF curriculum, increasing the expertise of a pool of recruits into the construction industry workforce whose projects BuildForward will fund. In addition, BuildForward is proud to be a sponsor of the 8th Annual North American Passive House Conference taking place in Pittsburgh, PA from October 15th–19th, 2013. This sponsorship demonstrates BuildForward’s role as an important financial supporter of the deep energy efficiency movement. Given the collaborative and mission-oriented nature of BuildForward’s business, the company expects to announce a series of such partnerships with environmental, corporate and governmental entities throughout its first year of operation.