Petros PACE Finance to Offer Market-Driven C-PACE Solution for Condominium Projects

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May 16, 2024, 13:31 ET

Purpose-Build Product Addresses Demand for Cost-Effective Financing for Condo Development

Initial Focus on High-Growth Markets Including Miami, Southern California and Other Metro Areas

AUSTIN, Texas, May 16, 2024 /PRNewswire/ -- Petros PACE Finance (Petros), the largest C-PACE provider in the country and leader in innovative structured finance, today announced a new C-PACE financing product designed to support new construction and development of condominium (condo) projects. This innovative solution opens up a new market for Petros and meets the ever-evolving needs of real estate developers and sponsors in high-growth cities around the country.

"We are very excited about this product innovation which solves a long-standing issue for the condo development community," said Mansoor Ghori, CEO and Founder of Petros PACE Finance. "Our team was able to 'crack the code' and develop a mechanism that allows real estate owners and developers the ability to capitalize on the unique tax-lien status of C-PACE loans in a complex condo structure. Developed in conjunction with some of our largest partners, this new product allows for affordable, reliable C-PACE financing for condo development projects, driving down costs and assisting condo developers in unlocking the value inherent in their assets."

C-PACE debuted in the early 2000's as an assessment-backed lien financing solution, providing access to funds for integrating energy-efficient features into both new construction and property improvement projects. It offers flexibility and support for developers looking to add to their new construction capital stack or for owners to access as retroactive financing. Initially, C-PACE encountered challenges with condo projects due to its traditional focus on commercial properties with single commercial tax liens -- unsuitable for residential condos. Additionally, its long-term, fixed-rate structure conflicted with the typical condo development model, where debt is repaid out of unit sale proceeds.

Despite the challenges posed by rising interest rates and the recent economic downturn, the demand for condos and other housing units continues to rise. However, there is a disparity between this demand and the current development landscape. To meet this market need, Petros activated its deep network of PACE program administrators, commercial real estate investors, and legal counsel to design a viable solution for residential condo developments. This uniquely tailored product will allow Petros to offer:

A structure that works for all stakeholders involved, including developers, mortgage lenders, and the final residential owner.
Fixed-rate financing that can be repaid as individual condo units are sold.
Flexible repayment and pay-down parameters that integrate the standard pay-down requirements of mortgage lenders on condo projects – allowing for repayment in as short as 3-4 years, rather than the traditional 25 to 30-year expectation.

"As a leading full-service commercial real estate capital advisor and lender, we are energized to work with Petros and incorporate C-PACE financing in our residential condo construction and development assets. This solution is long overdue and we are excited about the opportunity to support the growth of sustainable development by delivering impactful solutions for our clients," said Adam Lipkin, Vice President at Greystone Capital Advisors.

"Petros' new condo C-PACE financing solution presents a novel method to meet the demand for cost-effective financing for condo developments, traditionally burdened by high debt costs. This accessible offering holds significant promise for addressing the financial needs of our clients, specifically in urban cores such as Miami, San Francisco, and Los Angeles," said Brennen Brown, Managing Director at DA Davidson.

C-PACE eligibility varies by state and is currently available in 35 states and Washington, D.C. Petros, headquartered in Austin, Texas, is prepared to offer their new condo financing product nationwide, with a focus on states featuring strong urban markets such as California, Florida, and Texas. To learn more about utilizing C-PACE for condo development, visit: https://petros-pace.com/condominiums/.

About Petros PACE Finance

Petros PACE Finance, LLC is the national leader in the C-PACE marketplace, dedicated solely to providing long-term C-PACE financing to commercial property owners seeking to lower energy costs, reduce their carbon footprint and increase property values and meet environmental, social and governance (ESG) goals. The company is a platform portfolio investment of Apollo Global Management. Its leadership team has decades of executive-level experience in private credit and structured finance, with direct long-term institutional investor relationships. With billions in committed capital, Petros is able to close transactions in eligible C-PACE markets nationwide. To learn more about Petros PACE Finance visit our website at www.petros-pace.com.

SOURCE Petros PACE Finance, LLC