Leading up to the Connect Texas Multifamily event in Dallas on August 20th, we reached out to several conference participants for their insights on various commercial real estate topics. Among those we spoke with was Loren Biller from Pace Loan Group, who shared his expertise on commercial property-assessed clean energy (C-PACE) financing.
As traditional lenders have become more cautious about lending for certain types of properties, how does C-PACE financing provide a solution for borrowers?
LB: C-PACE is filling a gap in today’s market by providing an alternative source of funding. For construction loans, I can offer up to 25-35% of the property’s value depending on the state. This can help cover any shortfall in proceeds that may be capped at around 50% by traditional banks and allow borrowers to preserve their equity. Additionally, our fixed rates are available for terms as long as 30 years depending on the state.
In your opinion, what would be an ideal scenario for a C-PACE loan request?
LB: In an ideal situation, there would be new construction or adaptive re-use projects located in undersupplied submarkets with senior lenders open to utilizing C-PACE financing. However, I am always interested in unique opportunities where all parties involved are willing to work together towards finding solutions.
What do you think borrowers need now compared to when interest rates were lower?
LB: With higher interest rates currently impacting yields and returns from projects becoming increasingly important factors when considering investments decisions; developers must focus more closely than ever before ensuring they choose viable locations with high demand potential rather than taking risks based solely upon readily available capital sources alone.
Are you seeing borrowers become more innovative when it comes securing debt and equity or do they rely heavily upon lenders’ creativity?
LB: The most successful individuals within this industry are constantly seeking new ways improve processes and achieve success within their deals. Developers specifically consistently utilize value-engineering and optimization techniques to maximize their projects. During challenging economic times, such as the current market, unique financing options like C-PACE become more relevant. We have noticed a growing trend of borrowers engaging with us in a collaborative manner to find creative solutions for their projects.
