matthew mccormack | may 9, 2024

C-PACE as Rescue Capital in Higher Interest Rate Environment

C-PACE is no longer thought of exclusively as a way to increase leverage. In today’s market of variable interest rates and hesitant lenders, we’re seeing C-PACE financing used as a replacement for what would otherwise be senior debt, among other scenarios.

Think of PLG when:

• Your construction lender can't hold the entire loan: We are being brought in to deals to push the senior loan size down to either a) eliminate the need for a bank participant and/or b) expand the list of potential lenders to include smaller lenders, like regional banks.

• Your project is not yet stabilized, and the construction/bridge loan maturity is approaching: We are stepping in to refinance recently completed deals in bridge-to-bridge scenarios, blend down the cost of capital, cover cost overruns incurred during construction, and provide some relief on the next maturity date.

• Your construction loan quotes exceed SOFR + 400: We are being used as a way blend down the cost of capital from non-bank, non-recourse lenders. We can bring what was a SOFR + 500 execution down into the low to mid 10%’s. In certain states we can be the A-note, and a mezzanine lender can come in after us to get up to 60%-70% LTC on development deals.

C-PACE evolves with the state of the market, working as a flexible financing tool that helps deals pencil by filling gaps in the capital stack. Connect with us to see how C-PACE could benefit your project today:

Matthew McCormack
ORIGINATOR
matthew@paceloangroup.com

763-913-1461

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