CPACE to the Rescue

Author

Nathan Whigham
June 12, 2024

Tight Capital Market - CPACE to the Rescue

In a tight capital market CPACE can be a great option.

Back when I was originating loans for a CPACE lender in 2016, no one knew what PACE was. A lot of my time was spent educating property owners, developers, and other lenders about PACE. Getting senior lender acknowledgment for a PACE loan was tough because banks either didn’t know about PACE or didn’t understand it.

Today, it’s a different world. Most people in commercial real estate are familiar with PACE or at least have heard of it. Many banks are PACE-friendly and happy to provide acknowledgment of a PACE loan. And PACE has become much more flexible on deal terms and structure, allowing it to be used in a wider range of applications. Some lenders have even launched senior + PACE platforms where they can provide both the PACE loan and a senior loan, baking senior lender acknowledgment into the structure.

Why Choose CPACE?

  • Higher Leverage, Lower Cost: An attractive alternative to mezzanine or additional equity financing

  • Versatile Use: Perfect for new construction, building repositioning, equity refinance, and more

  • Non-Recourse: Since PACE loans run with the asset, they’re typically non-recourse

  • Rescue Capital: Ideal for properties with urgent capital needs and deferred payment structures

We’re in a tight capital market. Credit underwriting has tightened, leverage has decreased, and many sponsors are struggling to get projects financed or to service their existing debt. CPACE can be a solution since the combined leverage can reach higher in the capital stack and can spread loan payments over long amortization periods.

We have a strong relationship with a CPACE lender that is actively funding deals and has the ability to provide both senior and CPACE financing while considering a variety of deal structures.

Lending Criteria:

Loan Types

Bridge, Construction, Rescue, Equity Cashout

Property Types

Multifamily, Office, Hospitality, Industrial, Mixed-Use

Min/Max Loan Amount

$2M / No Max (can do CPACE loans in the hundreds of millions)

Max LTV/C

35% PACE / 90% Senior + PACE

DSCR

1.20 Combined

Max Term

30 Years

Rates

10UST + 3.75% - 4.25%

Prepayment Penalties

Flexible

Recourse

Non-Recourse

I’ve been building this email list this since 2017 and we’re up to 23,000+ professionals focused on the capital markets in commercial real estate, the space industry, LATAM and utilizing Data-as-an-Asset. So you’re in good company.

Be sure to connect with EN Capital on Linkedin. and visit our website here.


Nathan Whigham
President
CA DRE Broker License: 01793655

EN Capital Contact Info:
www.encapital.com
[email protected]
Direct Line: 310-465-92