Peachtree Group Approaches $750 Million in CPACE Financing

‍

ATLANTA (Dec. 9, 2024) – Peachtree Group (“Peachtree”) has reached a significant milestone in Commercial Property Assessed Clean Energy (CPACE) financing, surpassing the $1.0 billion mark—a distinction shared by only a select few companies in the industry. In 2024 alone, Peachtree completed 22 CPACE transactions across the U.S., surpassing its previous record for CPACE originations.

"In 2019, we launched CPACE, and today we've surpassed our first billion—a testament to the exceptional team and the strength of Peachtree’s vision,” said Jared Schlosser, Peachtree’s Executive Vice President of Hotel Lending and Head of CPACE. “Our strong foundation has not only fueled Peachtree’s success in CPACE financing but also solidified its position as a leader in the broader commercial real estate lending market.”

In the most recent loan origination rankings by the Mortgage Bankers Association, Peachtree was ranked as the seventh-largest commercial real estate investor-driven lender in the U.S.

The firm’s $1.0 billion in CPACE financing is rooted in hospitality, which remains its largest segment comprising approximately 45% of its total. However, Peachtree has successfully expanded into other sectors, particularly residential communities (including multifamily, student housing and senior living), which now represent 22% of the portfolio or $220 million. Additionally, the firm has executed numerous CPACE transactions across industrial, mixed-use and office sectors, showcasing its versatility.

“In this challenging lending market, CPACE financing has emerged as a crucial source of liquidity for all commercial real estate sectors. This financing option is becoming increasingly essential as owners grapple with looming debt maturities and limited refinancing opportunities,” Schlosser said.

Commercial real estate remains in a turbulent period with trillions of dollars in debt maturing and refinancing becoming increasingly difficult due to tighter lending standards from traditional lenders. These challenges are reshaping the industry and forcing property owners to seek alternative financing solutions.

“CPACE has been a game-changer, offering long-term fixed-rate financing that lowers the cost of capital while enabling property owners to pursue energy-efficient upgrades with reduced financial strain,” Schlosser said. “Peachtree is proud to lead the way in expanding access to this innovative solution, helping owners across all commercial real estate sectors.”

In just over a decade, CPACE has reached a cumulative $7.2 billion in U.S. commercial real estate financings, according to PACE Nation, confirming the growing market adoption and acceptance of this financing tool.

About Peachtree Group
Peachtree Group is a vertically integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, the company manages billions in capital across acquisitions, development and lending, augmented by services designed to protect, support and grow its investments.For more information, visit www.peachtreegroup.com.

‍

In today's financial environment, sponsors are looking for creative ways to capitalize deals. One such way is CPACE financing.

Peachtree EVP Hotel and CPACE Jared Schlosser sat down with Malcom Davies, host of the On the Edge podcast to discuss how sponsors can utilize CPACE for everything from leveraging development capital stacks to retroactively recapitalizing projects and even as a source of rescue capital.

Episode 3 | Creative Financing Using CPACE Lending with Jared Schlosser of Peachtree Group

In this episode, gain a greater understanding of:

• Commercial Property Assessment for Clean Energy (CPACE): How to Leverage it
• Combining CPACE, Construction, and Bridge loans
• Structural differences between CPACE, Mezzanine and JVA
• Retroactive CPACE Funding
• CPACE Restrictions and Opportunities
• CPACE as Rescue Capital

For more information on CPACE, visit our CPACE FAQs.

‍

CPACE financing (Commercial Property Assessed Clean Energy) sometimes referred to as PACE loans, is gaining traction as a viable option for hotel developers looking to optimize their capital stack. We spoke with Jared Schlosser, EVP of Hotel Lending and Head of CPACE at Peachtree Group to demystify CPACE financing and address common misconceptions.

‍

‍

Q: What specific advantages does C-PACE financing offer to hotel developers?

Jared Schlosser: C-PACE provides an attractive cost of capital today. Most of the deals we're handling are in the high seven percent range with fixed rates, which is cheaper than most other interest rates on the market. Whether you’re looking at senior loans, mezzanine debt, or preferred equity, C-PACE can often be a more affordable option. When you use C-PACE to replace a higher-cost source of capital, it can help make a deal work financially where it otherwise might not.

‍

Q: What are some of the common misconceptions that hotel developers have about CPACE financing?

JS: The biggest misconception is that no one consents to it. I often hear from developers who are interested in CPACE but believe that senior lenders won’t consent to it. I get five or six calls a day from people saying, "This CPACE thing sounds interesting, but nobody consents to it." That’s simply not true. We’ve closed 90 of these deals, so obviously, so somebody's consented to it!

We’ve worked with major banks, insurance companies, and debt funds to secure consents. We’re not asking anyone to do something we haven’t successfully done ourselves. For the right deal and with the right underwriting, senior lenders are more open to PACE financing today than they were five years ago.

‍

Q: Why should people come to Peachtree Group for their CPACE Financing?

JS: We have a strong track record of getting difficult deals done across the country, particularly in the hotel sector. Our team has deep expertise in hotel financing, which can be crucial when navigating the underwriting and consent process. Because senior lenders and other players in the capital stack trust our advice and trust what we're pitching to them.

‍

Peachtree Group is a direct balance sheet lender focused on funding first mortgage bridge loans, mezzanine loans, preferred equity investments, and commercial property assessed clean energy (CPACE) financing, lending to all commercial real estate asset classes with a specialty in hotel financing. The Peachtree Group team has executed more than 297 transactions, originating more than $4.5 billion for projects seeking capital to complete acquisitions, recapitalizations, refinancing and renovations

Looking for more on CPACE Financing? Check out Jared's appearance on the On the Edge Podcast.

‍

‍