Large-asset fixed-rate C-PACE product offers flexible short-term capital

PACE Equity launches large-asset C-PACE product to fill short-term capital gap

PACE Equity has introduced a new financing product for large Commercial Property Assessed Clean Energy (C-PACE) projects that offers fixed-rate, lower-cost, short-term capital with deferred payments and flexible prepayment options. The product targets large construction and mid-construction recapitalizations that need competitive pricing, payment relief during build or lease-up phases, and the option to refinance without heavy exit costs when market conditions improve.

Top takeaway

The new large-asset C-PACE solution served as the financing source for a $63.3 million fixed-rate recapitalization of the SkyRidge Resort development in Deer Valley, Utah. That transaction covered about 42% of the project’s construction budget, illustrating the product’s ability to fund large portions of construction costs and reduce overall weighted average cost of capital.

Key product features

• Fixed-rate financing to provide rate certainty for longer-term planning.
• Payment deferral allowing debt service to be delayed for up to four years during construction or lease-up.
• Flexible prepayment including the ability to prepay at par after five years and minimal penalties starting as early as year three; ability to prepay at par on short-duration basis is positioned as attractive in current markets.
• Competitive pricing with spreads starting in the high 200s over the 10-year U.S. Treasury cited as a pricing reference.
• Balance-sheet lender capacity to fund larger loans and provide committed capital for sizable transactions.

Why the market needs it

Developers and sponsors face a capital markets environment with still-elevated interest rates and a heavy wave of maturing commercial debt. Industry leaders point to nearly $1 trillion in commercial debt coming due in 2025, creating pressure to rely on shorter-term, higher-cost bridge or mezzanine financing. The new C-PACE product is positioned as a lower-cost alternative to those short-term options, enabling owners to lock in long-term fixed rates and remove immediate refinance pressure.

How developers can use it

The product is intended for both new developments and projects already under construction. Typical use cases include completing construction, covering cost overruns, funding interest reserves, reshuffling capital stacks, partially paying down senior debt, and extending time to stabilization. In some recapitalizations, C-PACE financing can refinance a portion—or, in certain cases, all—of senior debt to create breathing room and reduce the need for quick exits.

Proof of concept: SkyRidge Resort, Utah

The SkyRidge Resort financing demonstrates the product in action. The mid-construction recapitalization provided $63.3 million in fixed-rate C-PACE capital, covering about 42% of the construction budget for the lodge, clubhouse, and resort amenities. The resort project includes an 18-hole Topgolf®-branded golf course, a six-story Stelle Lodge anchoring the community, clubhouse and event spaces, an equestrian center with private trails, fine dining with an Argentinian culinary component, a rooftop deck and bar, spa, pool, fitness center, and private community amenities.

Energy and certification tie-ins

The SkyRidge developer qualified for a proprietary low-carbon certification that helped secure lower financing rates and additional energy savings by integrating high-performance upgrades to the building envelope and major systems including electrical, HVAC, lighting, and plumbing. Those upgrades are consistent with the broader industry shift toward building efficiency to lower operating costs and attract tenants.

Senior lender acceptance and market momentum

Acceptance of C-PACE among senior lenders has grown, and many lenders now see it as an accretive tool for closing large transactions without resorting to participation structures that share client details. Institutional adoption is increasing, deal sizes are growing, and C-PACE is now enabled in 40 U.S. states. Total industry lending volume reached nearly $10 billion at the end of 2024, reflecting accelerated use across asset classes.

Who benefits

Project sponsors requiring stability and lower cost of capital, senior lenders seeking tools to win and retain business on large transactions, and owners focused on long-term operating savings and tenant demand for efficient buildings all stand to benefit. The product is aimed at delivering short-term relief with long-term certainty, allowing developers to complete projects and refinance when market conditions are more favorable.

Background and origins

PACE financing originated about two decades ago from a municipal energy financing district and has since evolved into a commercial financing option used nationwide. The large-asset product builds on that proven C-PACE model while adding flexibility and scale intended for today’s capital markets.

FAQ

Key features at a glance