PACE Financing

PACE financing is something you talk about at a cocktail party

Seems like some banks would take the opportunity to layer the financing, have you seen that structure where one lender does the pace and the 1st?

emceedrive

Maineiac42 hit the nail on the head with his last point.

Senior lenders don't want to be subordinate to anything; having PACE financing attached to your deal means you're almost certainly going to get hit on spread and probably on leverage as well.

coming from a regional bank we wont touch PACE due to their priority lien position. wondering what it is like for other debt providers though? 

"First_Lien_Lending" The PACE market has matured significantly since this was initially posted. Senior lenders are warming up to PACE for a few reasons: i) PACE loans cannot be accelerated - meaning at no point can the loan be called. You're max exposure is what is due that year; ii) there's flexibility in the PACE structure to make it more attractive i.e. capitalizing interest through construction, fully funding into the same title company as Senior (proof of funds). and; iii) for NNN retrofit projects, it's a home run. There are legitimate energy and R&M savings which go along with the PACE loan.

The lender will underwrite it on a deal by deal basis, but many of them are realizing they need to be open to it to maintain relationships.

I work at a PACE shop, would be happy to chat more.

Sent PM

Thanks for the explanation. I'm currently a broker, interested in learning about different areas. Anywhere I can read up on PACE financing since I'm not getting exposure through my job. I found a few reports on ULI, any other places you recommend? Also, any recs for a general understanding of financing options in the real estate industry - basically starting from 0.