Articles Posted in C-PACE Financing

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14 March 2023

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Click here for the latest articles on C-PACE Financing.

The Global Hospitality Group of Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce the completion of $172 million in C-PACE (Commercial Property Assessed Clean Energy) financing transactions for the year 2022. This total includes over $97 million in hotels and condos, more than $58 million in multifamily, and $16 million in senior living facilities.

C-PACE is a low-cost, nonrecourse financing that creates a lien on the real property and is repaid through property taxes. It first emerged as a technique for funding energy-efficiency improvements and has developed into a widely-accepted and practical solution to financing new construction and improvements across all real estate classes.

C-PACE has remained an available and attractive option for financing new construction projects as more traditional financing has been negatively impacted by rising interest rates and the current economic environment. Led by Partner David A. Sudeck, the Group counsels lenders in these transactions and represents some of the leading names in PACE financing. Since 2020, David and his team have been involved in over $400 million in C-PACE loans. CONTINUE READING →

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09 September 2022

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GHG Partner David Sudeck Recognized as a Real Estate/Construction Law Trailblazer

Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce that Real Estate Partner David Sudeck has been recognized in the National Law Journal’s 2022 list of Real Estate/Construction Law Trailblazers.

This list honors legal professionals who have made significant marks on the practice, policy and technological advancements in their sector.

“David’s legal expertise and excellent client service have been essential to the success of the Global Hospitality Group and to the Firm as a whole,” said Jim Butler. “We are pleased that he has received this recognition as a Trailblazer.”

Sudeck is a seasoned dealmaker with an international reputation as an expert in hospitality projects. He provides critical business and legal advice to owners and lenders in the purchase, sale, development, construction, financing, leasing, and sale-leaseback of hotel, resort and mixed-use properties, including structuring complex hotel management and branding agreements.

In 2021, David and his team at JMBM’s Global Hospitality Group® closed more than $210 million in Commercial Property Assessed Clean Energy (C-PACE) loans and in 2022 assisted in structuring the largest ever C-PACE transaction in the United States. His trailblazing work in this area has led to him representing the top lenders in the space. As David told the National Law Journal, “[C-PACE financing] has been a critical part of the capital stack…Borrowers have embraced the fact that it is non-recourse financing at a low cost.”

To read David’s profile, click here.

CONTINUE READING →

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11 February 2022
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Hotel Lawyer: Another Commercial PACE (C-PACE) financing closed

David Sudeck and his team at the Global Hospitality Group® at Jeffer Mangels Butler & Mitchell LLP assisted in structuring a $103 million loan for Chinese Hospital in San Francisco, a non-profit community hospital. This transaction is the largest ever C-PACE transaction in the United States.

Chinese-Hospital-e1644620367122

photo: chinesehospital-sf.org

Property: Chinese Hospital
Location: San Francisco, CA
Size of C-PACE Loan: $103 million

How we can help with Commercial PACE (C-PACE) financing

C-PACE lending has become an important and fast-growing sub-specialty in our hotel finance capabilities. We work with C-PACE providers/lenders and borrowers. In fact, we have been fortunate enough to work with one of the leading providers of C-PACE financing as they expand their national platform.

We welcome inquires to see if we can help you evaluate potential PACE financing opportunities. CONTINUE READING →

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18 January 2022

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“Practice Group of the Year” awarded to
JMBM’s Global Hospitality Group
by Law360

Jeffer Mangels Butler & Mitchell LLP (JMBM) is proud to announce that the Global Hospitality Group® (GHG) has been selected as one of Law360’s Practice Groups of the Year. This award “honors the practices behind the litigation wins and major deals that resonated throughout the legal industry in 2021” and winners are chosen out of hundreds of submissions. The recognition is a result of the unsurpassed experience of the GHG team members who, for the past 30 years, have helped clients with more than 4,500 hospitality properties, valued at more than $112 billion.

Some notable accomplishments by members of the GHG in 2021 include:

  • Workout, recapitalization, and repositioning of a $1 billion mixed-use lifestyle hotel project
  • Sale of an NYSE-traded hotel REIT’s entire portfolio of 15 upscale, select-service hotels for $305 million
  • Closing more than $210 million in Commercial Property Assessed Clean Energy loans (C-PACE)
  • Assisting clients with hotel management and franchise agreements for properties worth more than $1.5 billion
  • Serving as primary counsel for lenders on more than $2.2 billion in the distressed hotel, retail, and office loans during the global pandemic, including over $500 million for a single client

CONTINUE READING →

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16 November 2021

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LOS ANGELES—The Global Hospitality Group® (GHG) of Jeffer Mangels Butler & Mitchell LLP (JMBM) has released an updated version of its Hospitality Credentials, detailing unsurpassed experience by providing representative clients and properties the GHG has worked on over the past 30 years. These Credentials show how the GHG has helped clients with more than 4,500 hospitality properties, valued at more than $112 billion.

Some notable accomplishments by members of the GHG over the last 12 months include:

  • Workout, recapitalization and repositioning of a $1 billion mixed-use lifestyle hotel project
  • Sale of a NYSE-traded hotel REIT’s entire portfolio of 15 upscale, select service hotels for $305 million
  • Closing more than $210 million in Commercial Property Assessed Clean Energy loans (C-PACE)
  • Assisting clients with hotel management and franchise agreements for properties worth more than $1.5 billion
  • Serving as primary counsel for lenders on more than $2.2 billion in distressed hotel, retail and office loans during the global pandemic, including over $500 million for a single client

CONTINUE READING →

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13 October 2021

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Click here for the latest articles on C-PACE Financing.

The Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce that their team has completed $210 million in C-PACE (Commercial Property Assessed Clean Energy) financing transactions in the past 12 months, for hotel, retail and multi-family real estate clients. Led by Senior Partner David A. Sudeck, the Group has worked on both the lender and borrower side of these transactions, and has represented some of the leading names in PACE financing.

“David and his team have been structuring these transactions since the beginning of the C-PACE program, and have developed an expertise in this area of financing,” said Jim Butler, Chair of JMBM’s Global Hospitality Group®. “This type of financing has become especially beneficial for clients during unpredictable economic fluctuations due to COVID.”

C-PACE is a low-cost, nonrecourse financing that creates a lien on the real property and is repaid through property taxes. In most cases, there is no balance sheet or personal liability of the owner or developer. Over the past several years, C-PACE financing has gained wider acceptance, and moved from a novel technique to a widely-accepted, practical solution to financings.

“Over the years, C-PACE has become an increasingly recognized part of the financing toolkit; the COVID downturn motivated lenders to become familiar with PACE in the capital stack,” said Sudeck. “As a result of that familiarity, we find that these same lenders are embracing the inclusion of PACE financing as an important part of a post-COVID marketplace.” CONTINUE READING →

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01 July 2021

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Is Commercial PACE (C-PACE) financing for your hotel or real estate development?

Global Hospitality Group® Chair Jim Butler was recently featured on the California Lodging Investment Conference’s official interview show, [CLIC] Connect. In this episode, Jim answers some current hot questions about C-PACE financing such as:

  • What is Commercial PACE financing?
  • What construction and upgrades are eligible for C-PACE financing?
  • How can Retroactive PACE free up cash from completed projects?
  • Why is everyone talking about C-PACE financing now?
  • Is C-PACE already “mainstream” commercial real estate financing?
  • Are there any problems or challenges with C-PACE?
  • Where can I learn more?

Click here to watch the full interview.

JMBM’s Global Hospitality Group® is a proud sponsor of the upcoming California Lodging Investment Conference. For more information, visit CLIC’s website here. CONTINUE READING →

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25 June 2021

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Click here for the latest articles on EB-5 Financing here for C-PACE Financing.

Some believe the recent Behring v. Wolf case revitalizes EB-5 financing for developers because it rolls back the EB‑5 minimum investment to $500,000

On June 22, 2021, in the case of Behring Regional Center LLC v Chad Wolf, a federal court in the Northern District of California effectively invalidated the final rules for EB-5 which became effective in 2019. These rules raised the minimum foreign immigrant investment from $500,000 to $900,000 and imposed other restrictions.

Many commercial real estate developers are hoping this development will launch a new surge of EB-5 financing that could fuel their projects, as was the case for years (until a few years ago when the music stopped).

Don’t get too excited about reliable EB-5 financing coming back – but there may be a better alternative . . .

For many years, we helped developers source and close EB-5 financing for new construction and development projects. We had a 100% success rate in closing all our EB-5 deals totaling more than $1.5 billion. But we have not felt comfortable using this source of capital for several years, because none of the reliable sources we worked with were able to commit to a deal. They couldn’t raise the immigrant investor funds.

What happened? More than 85% of the funding came from Chinese immigrant investors, and the USCIS processing times for immigrant visas grew to more than 15 years! No investor wants to wait 15 years to get the immigration visa he is paying for today.

These processing backlogs effectively killed EB-5 as a reliable and robust source of financing for commercial real estate development. The court decision invalidating the final rules on EB-5 will not fix this or any other issues with the program.

But a better alternative to EB-5 financing has come mainstream and should be considered. Many are not aware of this alternative – Commercial PACE (or C-PACE).

Is C-PACE the “new EB-5” financing for commercial real estate developments? YES and NO . . .

C-PACE is the “new EB-5” financing for commercial real estate developers, but only in one notable sense: virtually every commercial real estate developer will at least seriously consider C-PACE for projects in the 2020s, just as they did with EB-5 in the 2010s.

Other than the skyrocketing popularity and even more favorable terms, the C-PACE solution has nothing at all to do with the EB-5 program CONTINUE READING →

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18 June 2021

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Click here for the latest articles on C-PACE Financing.

Retroactive Commercial PACE (C-PACE) and C-PACE can provide critical capital and liquidity

In the past few years, Commercial PACE (C-PACE) financing has transformed from a novel financing technique to a popular and important source of capital for all types of commercial real estate — particularly hotels scrambling for financing to reopen and take advantage of the “Great Recovery” now underway.

Because of our early involvement and experience, C-PACE financing has become quite a specialty niche in the hotel financing resources of our Global Hospitality Group®, representing both C-PACE lenders and borrowers. Because of our profile in this area, I was recently asked to give my thoughts on its benefits in a timely article written by Bryan Wroten for Hotel News Now. You can read an excerpt below or click the link to read the entire article.

PACE Lending Allows Hoteliers
To Recapitalize Past Projects

By Bryan Wroten, Hotel News Now

A lending platform designed to fund investments in renewable energy and energy-efficient improvements, commercial PACE lending has helped hotel owners and developers in need of capital during the COVID-19 pandemic.

PACE financing, which stands for property assessed clean energy, originated in the late 2000s, said Jim Butler, partner at Jeffer Mangels Butler & Mitchell and chairman of the law firm’s global hospitality group. This type of lending has taken a while to fully catch on with developers because state legislatures have to pass laws to enable it. Often county and local municipal governments must pass their own legislation, as well.

Currently, 36 states and Washington, D.C., have authorized commercial PACE lending, and of those, 24 states and D.C. have active lending occurring.

PACE financing has the potential to reach into the billions and trillions of dollars, and part of that potential comes from the hotel industry, Butler said.

The pandemic has devastated U.S. hotels, forcing some to close temporarily or permanently. Hotel owners are dealing with the revenue declines of 2020 while also facing property improvement plan requirements over the next few years.

“They’ve been saving every penny and going to the bare minimum, but they’re going to have to do property improvement plans and rehire people … train them and do marketing,” Butler said. “They’re facing a lot of costs in getting back into business.”

One of the things that makes PACE financing so appealing to borrowers is it’s a self-assessment, similar to a tax improvement district, except the owner voluntarily imposes a long-term tax agreement on the property for up to 30 years, Butler said. It’s a non-recourse loan, and interest rates are typically low at about 5% to 6% because of its high security. Rather than the owner holding the debt, the loan remains with the property even following a transaction. CONTINUE READING →

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7 June 2021
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Click here for the latest articles on C-PACE Financing.

Hotel Lawyer: Another Commercial PACE (C-PACE) financing closed

The GHG Team worked with a C-PACE financing source to secure an over $10 million loan for the 190-room TETRA hotel, which includes a fitness center, full-service restaurant, and bar, and the 160-room AC Hotel by Marriott in Sunnyvale, CA.

AC-hotels

photo: marriott.com

Hotel: TETRA Hotel, Autograph Collection, and AC By Marriott Sunnyvale Cupertino
Location: Sunnyvale, CA
Size of C-PACE Loan: $10+ million

 

How we can help with Commercial PACE (C-PACE) financing

C-PACE lending has become an important and fast-growing sub-specialty in our hotel finance capabilities. We work with C-PACE providers/lenders and borrowers. In fact, we have been fortunate enough to work with one of the leading providers of C-PACE financing as they expand their national platform.

We welcome inquires to see if we can help you evaluate potential PACE financing opportunities.

Webinar and more on C-PACE financing

To learn more about C-PACE, check out our free on demand webinar, “Why so many are looking at Commercial PACE (C-PACE) financing now.”

You can also find more information on this topic on the Hotel Law Blog under the topic C-PACE Financing. Here are a few select articles and some representative transactions we have handled.

Is C-PACE the “new EB-5″ financing?

Retroactive C-PACE frees hotel investment capital

C-PACE Financing – Now an accepted tool for hotel lenders and borrowers

Should you be looking at Commercial PACE (C-PACE) financing now?

C-PACE Financing Lawyer: New York opening Commercial PACE – a big opportunity!

Some of our deals: C-PACE Financing on a roll!

Profile-David-Sudeck

David Sudeck is a senior member of JMBM’s Global Hospitality Group® and JMBM’s real estate department. His practice primarily involves the complex issues associated with hotels, resorts, vacation ownership properties (including shared ownership, destination clubs, timeshares, fractionals and private residence clubs), restaurants (including chef consulting agreements), golf courses and spas.

A seasoned real estate attorney, David has extensive legal experience involving all types of residential and commercial properties. He represents owners – including hospitality clients – in the purchase and sale, development, construction, financing, leasing, and sale-leaseback of properties, and advises them on their operations and management agreements, including hotel management agreements. Contact David Sudeck at 310.201.3518 or dsudeck@jmbm.com.

Picture of Jim ButlerThis is Jim Butler, author of www.HotelLawBlog.com and founding partner of JMBM and JMBM’s Global Hospitality Group®. We provide business and legal advice to hotel owners, developers, independent operators and investors. This advice covers critical hotel issues such as hotel purchase, sale, development, financing, franchise, management, ADA, and IP matters. We also have compelling experience in hotel litigation, union avoidance and union negotiations, and cybersecurity & data privacy.

JMBM’s Global Hospitality Group® has helped clients around the world with more than 4,300 hospitality properties worth more than $104.7 billion. Contact me at +1-310-201-3526 or jbutler@jmbm.com to discuss how we can help.

How can we help? Brochure Credentials Photo Gallery

Contact Information
Jim Butler, Chairman
Global Hospitality Group®
Jeffer Mangels Butler & Mitchell LLP
(310) 201-3526 • jbutler@jmbm.com
www.HotelLawyer.com

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