This year’s Connect Orange County event, taking place on September 10 at the Hyatt Regency Irvine, will provide valuable insights from industry leaders on various topics including the state of the market, industrial real estate in Southern California and financing options in today’s market. One of the experts speaking at this event is Bal Kumar, COO of PACE Loan Group. In preparation for his discussion on financing options, Connect CRE had a chance to interview Kumar:
Q: You have been involved in PACE since 2018. What drew you to this sector and specifically to PACE Loan Group?
A: I was attracted to PACE because it is a rapidly growing form of public-private partnership that allows developers to efficiently finance their projects. As someone with experience in policy-making and creating functional markets for capitalization purposes, I saw great potential in this sector. The flexibility offered by PACE loans – such as filling gaps in construction capital or providing rescue capital for struggling projects – also appealed greatly to me.
I joined PACE Loan Group because they have a track record of successfully underwriting complex commercial real estate deals and finding solutions for developers and property owners.
Q: Each state or county has its own unique nuances when it comes to their respective programs. Are these differences minor or can they significantly impact how borrowers operate across different states?
A: While there are slight variations between each state’s specific laws governing PACE programs, overall they function similarly nationwide. Some states may allow borrowers access more funds (25%-35% LTV) or offer longer loan terms (25-30 years), but as long as properties are located within eligible areas (which includes most states), then borrowers should consider utilizingPace Loansas part of their financing strategy.
Q: How doesPace Loanscompare with other forms offinancingfor green initiatives?
A:Pace Loansshould be viewed more like construction loans rather than just greenfinancingoptions. They offer long-term, fixed-rate, self-amortizing and non-recourse financing. The “green” aspect comes from the fact that most borrowers are constructing buildings that exceed code requirements. Additionally,Pace Loanscan also cover costs for resiliency measures such as seismic strengthening.
Q: PACE has gained widespread recognition in recent years. Does this make it easier for first-time borrowers to understand and utilize?
A: Yes, the learning curve is definitely getting shorter as more people become familiar withPace Loans.Borrowers and senior lenders are now seeing howPace Loanscan help fill gaps in capital stacks or assist with refinancing needs.PACEis a versatile form of financing that can blend into various situations seamlessly.
The postPACE Loan Group’sBalKumarontheFlexibilityoftheCapitalappearedfirstonConnectCRE.
