A REIT bought a building with 250 kW of solar it didn't want. Here's how it handed it off.
This case study is anonymized. Names and identifying details are left out to protect our clients. The deal is real.
The short version
- The situation
A retired owner sold his New Jersey building to a REIT. The 250 kW solar system stayed on the roof, but every contract and the loan stayed in his name.
- What we did
We set up one three-party agreement with the old owner, the REIT and the lender's sign-off, plus a site lease for the roof.
- The result
The system, the loan and the upkeep move to DGE. The REIT can re-roof or sell, and the old owner walks away clean.
Fast facts
- Who sold
- The original building owner (retired), with the REIT that bought the building
- System
- About 250 kW, rooftop
- Built
- Early 2010s
- State
- New Jersey
- Who buys the power
- The building, under a PPA
- Paperwork
- Contracts, loan and utility accounts all in the old owner's name
- Deal
- Three-party agreement plus a site lease
- Timeline
- About 12 months of work
A building changed hands. The solar didn't.
The owner built the system himself. He paid for it, and it lowered the building's power bill for years.
When he retired, he sold the building to a REIT and moved to another state. That is a normal, healthy sale. The solar just didn't fit neatly into it. The REIT bought a building. The solar came along with the roof, but the contracts, the loan and the utility accounts stayed with the old owner.
This happens all the time. Buildings change hands far more often than solar systems wear out.
Why the REIT called: a live system on a roof it needs to manage
A solar system makes electricity whenever the sun is up. It doesn't stop because a building was sold. Someone has to own that.
The REIT did the responsible thing. It sent maintenance crews to check that the system was safe. But running a solar system isn't its business, and it had real plans for the building:
- Re-roofing. You can't replace a roof without taking the panels off and putting them back, and someone has to own that job.
- Selling the building later. Buyers ask who owns the equipment on the roof. "Not sure" slows a sale down.
- Insurance. It wasn't clear whose policy covered the panels.
The old owner had the same problem from the other side. He still owned a system on a roof he no longer controlled, in a state he no longer lived in. Both sides wanted to move it forward.
The options: fix it up, rip it out, or hand it off
The REIT looked at three paths.
- Keep it and run it. That means taking on the contracts and the loan, and hiring people to run a power plant on the roof. It's not their business.
- Rip it out. That means paying to remove a system that still makes power, and paying off what's owed on it.
- Hand it to an owner who wants it. The system keeps working, and the problem moves to someone who does this every day.
The third path is harder than it sounds. A system this size, with thin maintenance records, scares off most buyers.
For most buyers, the juice isn't worth the squeeze on a project like this. We're a mission-based company. We take on solar of every shape and size, and this one fit.
What made it hard: a loan, missing records and third-party sign-offs
The panels were the easy part. The paperwork wasn't.
- The loan. The system has a loan, so the lender has to sign off before anything moves.
- Thin records. There was little maintenance history. We check the system ourselves to make sure it is safe and working before we take it on.
- Three sides to line up. The old owner, the REIT and the lender all have to agree on the same terms.
- Time. Deals with lenders and other outside parties take longer than anyone wants. This one has taken about 12 months of work.
We've done this many times. The work is getting every party to agree on what matters to them, and keeping it moving.
The deal: one agreement, three parties
We built a three-party agreement between the old owner, the REIT and Do Good Energy, plus a site lease for the roof.
- The system moves to DGE. We become the owner.
- We take on the upkeep, the insurance and the risk.
- The loan is handled in the deal, with the lender's sign-off.
- The site lease spells out how the system and the roof work together, including future roof work.
What each side gets
A clear answer about what's on its roof, a set plan for re-roofing, and a cleaner story when it sells.
A clean exit from a system he no longer wanted to manage from another state.
An owner that wants it, maintains it, and keeps it making power for years to come.
Is this you?
- You bought a building that came with solar.
- The person who put it in is gone, retired or out of state.
- The contracts are in someone else's name, or you can't find them.
- You're planning a new roof or a sale, and the panels are in the way.
- You're not sure whose insurance covers the system.
If any of these sound familiar, the fix is usually simpler than it looks.