Hotel Developers Turn to C-PACE as Traditional Lenders Pull Back
Lenders Say Fixed-Rate Deals Offer Lower Cost of Capital
As the availability of new-construction financing continues to tighten, an increasing number of hotel owners and developers are turning to commercial property assessed clean energy loans.
As the availability of new-construction financing continues to tighten, an increasing number of hotel owners and developers are turning to commercial property assessed clean energy loans.
Also known as C-PACE loans, these fixed-rate loans targeted at adding sustainable elements in building design and construction have become a lifeline for many hoteliers trying to get a deal done. More state and local governments are enacting legislation to allow C-PACE lending, and many different lender types are exploring the space now, further opening up lending opportunities.
The growth in popularity of C-PACE lending opened the opportunity for Petros PACE Financing to make the largest C-PACE deal to date, a $153 million loan as part of the $820 million Black Desert Resort Project in Utah. The loan will be used for different energy-efficient and resiliency elements in the resort’s design, including LED lighting, low-voltage wiring, the heating, ventilation and air conditioning systems and seismic strengthening.