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Bipartisan Interest Fuels Widespread Adoption of C-PACE Financing Laws It may have taken more than a decade, but after starting out as a niche financing vehicle to create more energy-efficient and resilient buildings, the commercial property assessed clean energy (C-PACE) program has arguably achieved mainstream acceptance. Roughly 40 states and Washington, D.C., now either offer or are developing C-PACE programs. Over the last year alone, Georgia, Hawaii, New Mexico, Minnesota and Idaho passed legislation enabling or substantially improving the financing tool, points out Rafi Golberstein, CEO of PACE Loan Group, a direct lender of C-PACE headquartered in Minneapolis, Minn. What’s more, he adds, New Jersey and North Carolina are among states that in the coming months are expected to advance bills authorizing the use of C-PACE, or PACE for short. Given the current partisanship within the country, one of the most revealing characteristics of PACE’s growing appeal has been its ability to cross the political aisle, Golberstein observed. PACE’s popularity in particular has ascended over the last several months as developers have sought fresh capital to enhance their financial flexibility in a rising interest rate environment. “PACE is really turning out to be a bipartisan issue, as many state lawmakers are realizing that it is a great financing tool for commercial real estate renovations as well as economic development,” says Golberstein, who also is on the executive committee of C-PACE Alliance, a trade group lobbying for the program’s expansion. “It’s refreshing to see state legislatures pick this up, whether they happen to be blue states, red states or purple states. We don’t view a state’s tendency to lean one way or the other as a major hurdle to the program’s expansion.” https://lnkd.in/dY3fgh-Y Sponsored by PACE Loan Group #cre #commercialrealestate #paceloans #cpace

C-PACE’s popularity has increased as banks retreated from commercial real estate lending in recent years and demand for sustainable property development increased. More states are also legally allowing C-PACE financing. Cumulative C-PACE investments shot up from $2.3B in 2020 to $7.2B in 2023, according to PACENation data. About 40 states plus Washington, D.C. have laws allowing PACE financing. More states adopting PACE-enabling legislation may be partially responsible for boosting C-PACE loan originations, and additional states are considering legislation that would allow it. #CPACE #CleanEnergy #CommercialFinancing #CommercialRealEstateLending

RICHMOND, VA - More details are coming to light about how Richmond’s new plan to finance the ballpark-anchored Diamond District development would play out. Ordinances introduced Monday by City Council reveal more of the nitty-gritty behind the new plan in which the city would issue its own bonds to finance the ballpark and infrastructure for the development’s first phase, which has grown in size and scope. Where the first phase had previously totaled 22 acres, with the ballpark filling a 7-acre footprint, a new development plan included in the ordinances shows the first phase now totaling 30 acres, with the 360-degree-design, 10,000-seat stadium filling 10 of those acres. The first phase now includes land north of Robin Hood Road as well as areas adjacent to the stadium at the site’s southern end. The new agreement calls for those sites to be developed in three subphases, the first of which includes the ballpark and land beside it. The city would issue $170 million in bonds to finance the total phase, with $130 million in general obligation bonds going to the ballpark and $40 million in lease revenue bonds covering the infrastructure improvements. The stadium bonds would cover construction of the $110 million stadium as well as costs to design, acquire and equip it. The city would assume the debt on all of those bonds, meaning it would be responsible for repaying them if the stadium isn’t built or the project does not pay for itself with tax revenue generated by the development over time. The city wants to issue its own bonds because of the cost savings expected from a lower municipal interest rate and to secure $24 million in state sales tax incentives that are set to expire July 1. Issuing its own bonds also would ensure a faster turnaround to complete the ballpark by the city’s April 2026 target. The debt on the stadium bonds would amount to $7 million in annual payments that otherwise would be covered by the incremental tax revenue. The infrastructure debt payments would be $3 million annually, depending on the amount of stadium rent to be paid by the Richmond Flying Squirrels that otherwise would cover the cost of the bonds. The ballclub’s lease agreement would establish the rent payments but has yet to be finalized and was not included in the ordinances, which council could vote on after a public hearing scheduled for its April 22 meeting. Also referred to in but missing from the documents is a development agreement for the new ballpark between the Navigators Baseball LP, which is the Flying Squirrels’ ownership entity, and the Richmond Economic Development Authority, which owns the land. FOR MORE DETAILS, CLICK ON THE LINK BELOW #escrowcredirt #newmarktitleservices

C-PACE lending is experiencing a surge in popularity within the commercial real estate sector, driven by rising interest rates, its unique financing structure, and increasing adoption across the US. However, while C-PACE has proven immensely popular in many parts of the country, not all jurisdictions are seeing the full benefits. Despite an urgent need for green financing solutions in New York City, the C-PACE program has struggled to gain traction there due to overly restrictive regulations, hindering its potential to support emissions reduction goals. Check out my latest Propmodo piece, where I examine the benefits of C-PACE in real estate today, but also the places where troubles have arisen. #cpace #commercialrealestate #sustainablefinance https://lnkd.in/eN_YqcPp

#RealEstateInvestors - Use these #loans to get your #constructionproject across the finish line https://zurl.co/Msjc #DeborahPeterson #DownsizingPNW #Downsizing #RealEstate #eXpRealty

At the close of the 2024 NIC Fall Conference, a panel of ownership groups and lenders were optimistic, anticipating growth due to favorable conditions like rate cuts. However, borrowers are likely to face challenges securing construction financing, despite rising demand in many markets. #BYS #BYSSolutions #HealthcareFinance #AssetBasedLending

As a commercial real estate appraiser and property assessor, I'm excited to share a significant development in property financing that could impact our industry. A recent IRS private letter ruling has expanded the potential for Commercial Property Assessed Clean Energy (C-PACE) financing, which could have notable implications for property valuations and assessments. Key points for appraisers and assessors: 1) Valuation Impact: The increased availability of C-PACE financing could lead to more energy-efficient improvements in commercial properties. This may positively affect property values due to reduced operating costs and increased marketability of "green" buildings. 2) Assessment Considerations: As C-PACE loans are repaid through property tax assessments, we'll need to carefully account for these in our property tax calculations and ensure they're correctly reflected in our assessments. 3) Long-term Perspective: The long repayment terms (20-30 years) of C-PACE financing mean we'll need to consider the long-term impact on property values and tax burdens when appraising or assessing affected properties. 4) Market Trends: This ruling could accelerate the adoption of energy-efficient improvements in commercial real estate. As appraisers and assessors, we'll need to stay informed about these trends and their impact on local markets. 5) Comparables: As more properties utilize C-PACE financing, we may need to adjust our approach to comparable sales, ensuring we account for the presence or absence of C-PACE assessments and related improvements. This development presents both opportunities and challenges for our profession. It's crucial that we stay informed and adapt our methodologies accordingly. Thank you to the crew at Dentons (Charles Gelinas, Marshall Feiring, Ryan J. Zucchetto and fellow Cornell alum Alexander Hakopian)

Will C-PACER, the cheapest financing option for many commercial energy projects, realize its full potential in the most regulated property market? C-PACER enabling legislation was passed shortly after WA became the first state to announce a building performance standard. But due to COVID related budget constraints at the time, WA decided to take a shortcut. Instead of administering PACE at the state level, these technical duties were assigned to counties who struggle with limited bandwidth and complex financial matters. The consequence - out of the 39 counties in WA State subject to onerous regulations, only 8 have made C-PACER available to property owners, and only a handful of transactions have closed. This is a very big problem. Many billions in C-PACER capital must flow throughout WA's commercial building stock. This scale will only be achieved with a specialized state-level administrator who can harmonize what is now a fragmented market, who can lower administration fees that weigh heavily on smaller projects, and who is better equipped to engage and educate the commercial sector. Such institutional capacity building warrants state funding. Here are a few other ways the state can spur more C-PACER investments - 1) capitalize a loan loss reserve for senior lenders who agree to subordinate, 2) collect payments from property owners and remit funds to C-PACER lenders, that way a third-party is monitoring the performance of the loan, which reassures senior lenders, and 3) capitalize a low-income C-PACER facility for projects that fail to meet the higher debt coverage thresholds of private lenders who need confident cashflows undergirding this non-recourse debt. C-PACER will only thrive in WA if the state assumes a more active role. Lenders cannot go it alone. And counties are not the partners lenders need. Furthermore, if enough public capital is placed on the table, if a "CCA put" can be engendered, then private parties will have greater conviction to seal transactions, especially senior lenders who fret about their security position. Perception is key. WA State should step up and say - I have got your back.

This article partially explains the housing crisis. Except, it’s missing a critical piece of information. The change from Loan to Value vs Loan to Cost that cost a homebuilder approximately $600k cash to borrow construction funds for 6 homes. If homebuilders can’t secure construction loans, we can’t build homes. The crux of the problem… It’s not land, it’s not labor, it’s not governmental regulation - it’s money. #housingcrisis #realestatelending #newconstruction #affordablehomes

Over a 13-business day period from engagement to closing, JDI Realty LLC has successfully originated a $10,000,000 loan to recapitalize the to-be-completed redevelopment of a 76,534 SF, six-story, elevator served office building into 95-market rate apartment units, located in Jacksonville, Florida. This multi-parcel site, initially pledged as our collateral, encompasses 16.44-acres, including two additional, identical 76,534 SF, 95-unit office-to-multifamily convertible buildings plus surplus developable land. The total assemblage was acquired from 2022-2024 at a cash basis approaching the JDI loan amount before considering the additional cash improvements of $12,000,000 funded to date as this site’s initial phase of redevelopment. Based upon current entitlements, this site is being programmed for the development/redevelopment of at least 850 rental residential units plus a 12,000 square foot community wide clubhouse and outdoor pool/pavilion. As this experienced Canadian Sponsor’s first US project, to establish credibility and earn potential lender respect, the Sponsor intended to fund this initial phase employing no debt whatsoever. However, Sponsor’s tax counsel advised that the Canadian government might become punitive with Canadian developers who were expatriating Canadian funds into the US, so in combination with his equity contribution of approximately $14,000,000, JDI’s funds will move the asset to certificate of occupancy. As outlined above, this recently closed bridge loan further affirms JDI’s ability to promptly, and flexibly, execute situationally complicated transactions. If you are interested in hearing additional details about this specific transaction or our bridge debt or equity capabilities, please feel free to contact Mark Nasca at 440-893-9000 (w)/440-554-5136 (c) or Phillip Nasca at 440-893-9000 (w)/440-708-3849 (c) or any of the other JDI Realty LLC members for more information.