C-PACE Learning Center

At last night’s REjournals Award Ceremony, the Real People of PACE Loan Group were highlighted as CEO Rafi Golberstein and Managing Director – Underwriting Angela Ledding received three awards for their accomplishments and leadership in commercial real estate.

To make NYC’s C-PACE program more user-friendly, NYSERDA and NYCEEC (the relevant authorities) must release new construction guidelines as soon as possible; the DOF amended the local ordinance to include these projects last November. Additionally, they must make it easier for retrofits to qualify.

Adaptive reuse is an important sustainability strategy and has become especially relevant given the post-pandemic office market. Record low occupancies and the ongoing housing shortage have created a unique opportunity for building owners to convert vacant office buildings into flourishing multifamily projects.

PLG’s originations team traveled across the country in January and February to attend three important industry events: MBA-CREF, NMHC, and ALIC. Collectively, we heard about the increasing cost of capital, less uncertainty from senior lenders, and an improving climate to bring C-PACE consideration into stalled, restructuring, or maturing deals.

With the current economic uncertainty and resulting pull back on mortgage lending, CRE developers and owners are seeking out alternative sources of financing for their properties. In these circumstances, C-PACE fills in those capital stack gaps, adding leverage and substituting more expansive mortgage debt.

Commercial Property Assessed Clean Energy (C-PACE) financing helps offset renovation and retrofit challenges by covering the cost of the building upgrades that breathe life back into an older building.

Facing current economic/market challenges of inflationary concerns with rising costs and rising rates caused mostly by supply chain issues have many CRE developers/sponsors in “unchartered territory.”

Owners, sponsors and developers are utilizing C-PACE financing’s efficient structure to enhance their project’s sustainability. However, as is typical with emerging financing mechanisms, mischaracterizations and misunderstandings about PACE and its implications remain.

Companies and developers at the nexus of commercial real estate (CRE) and sustainability are all asking the same question: “What does the Inflation Reduction Act (IRA) mean for me?” CRE developers are well-positioned to save thousands of dollars annually while also benefiting the environment through the IRA.

Commercial Real Estate Developers are looking for new ways to reduce the capital costs associated with construction and development. Many are turning to C-PACE (Commercial Property Assessed Clean Energy) financing, which reduces their cost of capital while providing energy efficiencies for their projects.

PACE financing is surprisingly flexible – and can fill financing gaps in any market condition. PACE gives developers a critical tool to add liquidity to any project.

As part of its mission to give back to local communities, PACE Loan Group supports the Camden Collective through leadership, volunteering, and donations. PLG is also supporting the Minneapolis nonprofit PICA by partaking in The Wish Tree, a PICA program that provides local companies with holiday wish lists of children from low-income families in Hennepin County.

PLG makes complicated financing structures easier for commercial real estate developers and owners, helping them capitalize on their renovations, new construction, or conversion projects.

The annual Las Vegas gathering of commercial real estate lenders and originators was held the first week of September. While attendance was down from a pre-COVID high of 2,500, those who attended were in deal-making mode.

While attending CREF-C in Miami, the PACE Loan Group team noted a general sense of optimism about interest rates and increased transaction volume in 2024. While PLG expects rates to remain high relative to the historical lows observed over the past several years, the continued strain on the overall refinancing market will provide significant opportunities for preferred equity players and alternative forms of financing, including C-PACE.