Commercial Observer: Peachtree Closes $52M CPACE Loan for California Townhomes
$51.5MM CPACE (30-year term) loan in a 224-unit townhome development in the Vinedo Community of Paso Robles, CA.
Article Originally Featured in HotelBusiness.com
As the commercial real estate lending environment continues evolving in response to economic pressures and shifting borrower needs, CPACE (Commercial Property Assessed Clean Energy) financing is becoming more prominent, with projections of it surpassing $10 billion in cumulative investments this year. According to Peachtree Group, a leading hospitality and commercial real estate financier, CPACE originations for the firm are expected to increase by 15–25% this year, marking another strong year for this creative financing solution.
More States Implement or Expand CPACE Legislation
This projected growth is fueled by legislative momentum, borrower demand for capital flexibility and gaps in traditional lending. CPACE programs, long supported by energy efficiency and sustainability goals, are seeing broader market adoption.
As more states implement or expand CPACE legislation, borrowers will have increasing access to a financing option—currently available in 40 states and the District of Columbia—that offers long-term, fixed-rate, fully assumable debt, a rare combination in today’s higher-rate environment.
Closing the Funding Gap
Banks' tightening of construction lending has created a gap in the capital stack, and CPACE is emerging as a critical tool to bridge that gap with flexible, borrower-friendly terms. Hotel developers, in particular, are leveraging CPACE to offset rising construction costs and inflationary pressures. Whether for ground-up development or major renovations, the program provides a cost-effective alternative that aligns with the longer lifecycle of hospitality assets. Importantly, firms like Peachtree Group are now bundling CPACE with senior loans to provide a seamless financing solution that simplifies deal structures and accelerates timelines.
Benefits of Retroactive CPACE
An emerging trend gaining traction among hotel owners is the use of retroactive CPACE financing.
While CPACE is typically arranged before construction begins, retroactive CPACE allows eligible property owners to secure this funding after a project is completed—sometimes even years later. The allowable "look-back" period varies by state but generally ranges from two to three years. This form of financing is proving especially valuable for owners by providing lower-cost liquidity and enhancing cash flow on projects that were initially funded through traditional means.
A recent example is the Hilton Garden Inn in Davis, Calif., which underwent a renovation in 2019. Peachtree Group originated the retroactive CPACE financing, and the proceeds were used to pay down the senior loan and fund the buildout of a fitness studio attached to the hotel.
As awareness of retroactive CPACE grows, more borrowers are expected to revisit previously completed projects to unlock capital, improve balance sheets or reinvest in future developments.
The CPACE Advantage
In a macroeconomic environment still marked by persistent high interest rates and cautious bank lending, CPACE's fixed-rate, non-recourse nature stands out. As more stakeholders, including municipalities, developers, and capital providers, embrace CPACE's flexibility and stability, its role in reshaping commercial real estate finance will only deepen. For hotel developers and owners looking to navigate today's complex capital markets, CPACE isn't just an option, it's a strategic advantage.
Peachtree Group
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. Jared Schlosser is responsible for Peachtree's hotel originations platform and its CPACE program.
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Peachtree Group has originated a $51.5MM CPACE (30-year term) loan on a 224-unit townhome development in the Vinedo Community of Paso Robles, CA. The Reserve is part of the 279-acre master-planned Vinedo community, which, at full build-out, will contain ~1,425 total homes. The CPACE loan will fund the building envelope, HVAC, lighting, solar PV, plumbing, seismic improvements, and qualifying soft costs as the eligible costs are incurred during the construction process. The sponsor, Adam Tancredi comes from a 70-year-old family legacy of homebuilding and has over 17 years in the real estate development industry with an emphasis on both residential and commercial developments.
Read full article on commercialobserver.com
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Peachtree Group Surpasses $1.0 Billion in CPACE Financing
Peachtree Group has reached a significant milestone in Commercial Property Assessed Clean Energy (CPACE) financing, surpassing the $1.0 billion mark.
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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.
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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.
On the Edge Podcast: Creative Financing Using CPACE Lending
Peachtree EVP 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.
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.