Articles Posted in C-PACE Financing

Published on:

23 April 2021
See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on C-PACE Financing.

Hotel finance lawyer: Commercial PACE (C-PACE) Financing is now mainstream

Over the past five years, Commerical PACE (C-PACE) financing has gained wider acceptance, and moved from a novel technique to a mainstream practical solution for financing. For more background on what C-PACE financing is, why it can be attractive, why it is becoming more popular and how JMBM’s attorneys can help, see C-PACE Financing – Now an accepted tool for hotel lenders and borrowers.

Our lawyers are at the leading edge of this important new trend. And we think that sharing some of our client’s successes with C-PACE financing may help others evaluate this tool for their own needs. So this is one in a series of successful C-PACE financing closings.

David Sudeck of the Global Hospitality Group® at Jeffer, Mangels, Butler & Mitchell LLP recently worked with a C-PACE financing source to close a retroactive $6 million PACE loan for the 105-room Kimpton La Peer Hotel in West Hollywood, CA. The property includes a full-service restaurant, pool and rooftop deck.

la-peer-lobby-150x150

photo: lapeerhotel.com

Hotel: Kimpton La Peer
Location: West Hollywood, CA
Size of C-PACE Loan: $6 million

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Published on:

20 February 2021

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on C-PACE Financing.

Hotel finance lawyer: C-PACE Financing is now mainstream

About five years ago, my partner David Sudeck, a senior member of JMBM’s Global Hospitality Group®, spoke at a hotel industry conference about the attractive features of Commercial PACE (or C-PACE) financing as an innovative financing technique. David has extensive experience with virtually all kinds of real estate financing from senior debt to joint ventures. At the time, he had just finished working on a hotel financing that included components of a senior construction loan from a private lender, Mello Roos community facilities district financing, EB-5 financing, and C-PACE Financing. Few people in the audience at the conference had heard about Commercial PACE financing, and there were a lot of questions about its characteristics.

Over the past five years, C-PACE financing has gained wider acceptance, and moved from a novel or creative technique to a widely-accepted practical solution to financings. It has gained traction with both lenders and borrowers. But its gradual increasing use was accelerated by the COVID pandemic and resulting lockdowns, and near collapse in many segments of the hospitality industry. The accompanying deficiency of construction and other financing since March 2020, supercharged the importance and use of C-PACE Financing. Over the past few months alone, David Sudeck and his team have worked, on the lender and borrower-side of transactions, on more than a dozen Commercial PACE financing transactions. The largest that we have worked on, more than $40 million of C-PACE financing, closed just a few weeks ago.

At this point, most owners and developers are considering C-PACE financing as part of their capital stack for development, for renovation, and for rescue capital (more on this below). And more and more lenders have been approving C-PACE as a part of the capital stack. Why, you ask?

Why C-PACE financing can be attractive:

C-PACE financing takes the form of a voluntary tax assessment on real property, having the same features and priority as an ad valorem real property tax (typically paid only twice per year, when real property taxes are paid). Here are some of the features that may be negotiated which can make it attractive financing: CONTINUE READING →

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