June 18, 2021
Find out how JMBM’s Global Hospitality GroupÂ® can help you.
Click here for the latest articles on C-PACE funding.
Retroactive Commercial PACE (C-PACE) and C-PACE can provide essential capital and liquidity
Over the past few years, PACE Commercial Finance (C-PACE) has grown from a new financing technique to a popular and important source of capital for all types of commercial real estate – especially hotels scrambling to get funding to reopen and take advantage of âBig Recoveryâ now underway.
Due to our early involvement and experience, C-PACE Finance has grown into a specialized niche in hotel finance resources of our Global Hospitality GroupÂ®, representing both C-PACE lenders and borrowers. Due to our profile in this area, I was recently asked to comment on its benefits in a timely article written by Bryan Wroten for Hotel News Now. You can read an excerpt below or click on the link to read the full article.
The PACE loan allows hoteliers
Recapitalize past projects
By Bryan writes, Hotel news now
A lending platform designed to finance investments in renewable energy and energy efficiency upgrades, PACE commercial loans have helped hotel owners and developers in need of capital during the COVID-19 pandemic.
PACE funding, which stands for Clean Energy Rated by Property, began in the late 2000s, said Jim Butler, partner at Jeffer Mangels Butler & Mitchell and chairman of the law firm’s global hotel group. This type of loan has been slow to take hold on developers, as state legislatures must pass laws to allow it. Often, counties and local municipalities must also adopt their own legislation.
Currently, 36 states and Washington, DC have authorized PACE commercial loans, and of these, 24 states and DC have active loans.
PACE’s funding has the potential to reach billions and billions of dollars, and some of that potential comes from the hospitality industry, Butler said.
The pandemic has devastated American hotels, forcing some to close temporarily or permanently. Hotel owners face declining revenues for 2020 while facing the demands of the property improvement plan over the next several years.
âThey’ve saved every penny and gone to the bare minimum, but they’re going to have to make property improvement plans and rehire peopleâ¦ train them and do the marketing,â Butler said. âThey face a lot of costs to get back into business. “
One of the things that makes PACE financing so attractive to borrowers is that it is a self-assessment, similar to a tax improvement district, except that the owner voluntarily imposes a long-term tax agreement. on property for up to 30 years, Butler said. This is a non-recourse loan, and the interest rates are generally low around 5% to 6% due to its high security. Rather than the owner holding the debt, the loan stays with the property even after a transaction.
PACE loans are tied to energy efficiency spending during new construction and renovations, and the upgrades can help save utility costs, he said. Borrowers can use PACE loans for items such as HVAC systems, insulation, water supply systems, geothermal heat recovery, lighting and solar energy.
In some states, like California, homeowners can take advantage of what’s called “retroactive PACE,” Butler said. This means that homeowners can receive PACE funding for eligible capital expenditures made in the recent past. California has a 36 month window.
âYou can include any expenses that have already been made and are eligible for PACE funding,â he said.
This means owners can review what they spent on qualifying upgrades within the allotted time frame and recoup that cost through PACE, he said.
âYou don’t have to spend it on these things,â he said. âYou just must have spent it on them. If so, your funding is available for whatever you choose. Pay off senior debt, operating expenses, expansion.
Read the full HNN article here.
How We Can Help You With Commercial PACE Financing (C-PACE)
C-PACE loans have become an important and rapidly growing sub-specialty in our hotel finance capabilities. We work with C-PACE suppliers / lenders and borrowers. In fact, we have been fortunate enough to work with one of the leading C-PACE funding providers as they expand their national platform.
We welcome inquiries to see if we can help you assess potential PACE funding opportunities.
Webinar and more on C-PACE Funding
To learn more about C-PACE, see our upcoming webinar, “Why are so many people turning to Commercial PACE Financing (C-PACE) now?” “
You can also find more information on this subject on the Hotel Law Blog under the heading C-PACE Funding. Here are some selected items and some representative transactions that we have processed.
C-PACE financing – Now a tool accepted by hotel lenders and borrowers
Should You Consider Commercial PACE Financing (C-PACE) Now?
C-PACE Avocat Financement: Commercial PACE opens in New York – a great opportunity!
Some of our offerings: C-PACE Financing on a Roll!
This is Jim butler, author of www.HotelLawBlog.com and founding partner of JMBM and JMBM’s Global Hospitality GroupÂ®. We provide business and legal advice to hotel owners, developers, independent operators and investors. This advice covers critical hotel issues such as buying, selling, development, financing, franchising, management, ADA, and intellectual property issues. We also have compelling experience in hotel litigation, union avoidance and union negotiations, as well as cybersecurity and data privacy.
JMBM’s Global Hospitality GroupÂ® has been involved in more than $ 87 billion in hotel transactions and in more than 3,900 hotel properties located around the world. contact me at + 1-310-201-3526 or [email protected] to discuss how we can help you.
How can we help? Brochure References Photo gallery