Strategic developers and owners turn to C-PACE financing for creative capital stack solutions
Heartland Real Estate Business Journal recently published an article authored by Executive Vice President, Ethan Elser.
In today’s turbulent commercial real estate landscape, developers and property owners face challenges to secure sufficient competitively priced capital. High interest rates, compressed valuations and a low leverage lending environment have complicated funding strategies and eroded traditional capital stack assumptions.
More and more, property owners and developers are turning to Commercial Property Assessed Clean Energy (C-PACE) financing due to its core attributes: low cost, non-recourse, long-term and fixed-rate capital. With amortization periods of up to 30 years, owners and developers recognize that C-PACE terms are virtually unmatched in the private debt markets. As an assessment tied to the property rather than the borrower, C-PACE funding is being leveraged more than ever to support creative solutions in today’s marketplace.
C-PACE has evolved into a dynamic financial tool used across the lifecycle of a building — from new construction to recapitalizations to retrofits.
C-PACE is used by savvy commercial real estate professionals to optimize their capital structure and boost their internal rate of return (IRR).
C-PACE is growing in popularity as an alternative to mezzanine debt, preferred equity, and other high-cost financing. In today’s environment, C-PACE is particularly useful as an option to retire maturing bridge or construction debt, cover cost overruns, or recapitalize during a slower-than-expected lease-up period — all without diluting ownership or resorting to high-yield alternatives.
