In December, Peachtree Group achieved a significant milestone by securing $150 million in Commercial PACE (CPACE) financing, approaching $750 million completed since its inception in 2019. For the year, Peachtree Group completed 23 commercial property-assessed clean energy financing transactions across the U.S. for approximately $250 million in directly originated and balance-sheet-funded CPACE financing.
Commercial real estate faces a tough 2024 as trillions of dollars in debt come due and refinancing gets harder, compounded by banks’ tightened lending standards.
CPACE grew relatively quickly and, in just over a decade, has hit a cumulative $5.2 billion in U.S. commercial real estate financings, according to PACENation, which confirms the growing market adoption and acceptance of this innovative financing tool.
Peachtree Group is one of the most active hotel commercial real estate lenders in the U.S., ranking as the eighth-largest U.S. hotel lender by the Mortgage Bankers Association in their most recent rankings. Of the CPACE transactions completed this year, roughly 50% were in hospitality.
The notable CPACE transactions completed this year include:
Hospitality
— The Thompson, Palm Springs, Calif.
— El Caminante, Dana Point, Calif.
— The Marriott Tribute Hotel, St. Augustine, Fla.
— Palihotel, San Francisco, Calif.
— DoubleTree by Hilton Youngstown Downtown, Youngstown, Ohio
Non-Hospitality
— 950 3rd Street, Washington, DC (Multifamily)
— Reserve at Vinedo, Paso Robles, Calif. (Multifamily)
— Old City Hall, Tacoma, Wash. (Mixed-Use)
KEY QUOTES:
“In this challenging lending market, Commercial Property Assessed Clean Energy financing has emerged as a crucial source of liquidity. This financing option is becoming increasingly essential as owners grapple with looming debt maturities and limited refinancing opportunities.”
“CPACE has been a game-changer by offering a unique advantage over other forms of financing with its long-term, fixed-rate financing that lowers the project’s cost of capital.”
“CPACE financing aligns with the financial, environmental and guest experience goals of hotels, making it a popular choice for owners looking to improve energy efficiency, reduce costs and enhance their sustainability initiatives.”
“This innovative financing mechanism empowers property owners across all sectors to embark on energy-efficient upgrades, renewable energy installations, and water conservation initiatives, all while minimizing their financial burden.”
– Jared Schlosser, Peachtree Group’s senior vice president, origination and head of PACE
