PACE Loan Group’s Rafi Golberstein: Get Cap Stack Flexibility, Look-Back Capital and Quick Closing With C-PACE

Rafi Golberstein is CEO of C-PACE originator PACE Loan Group, which has a deep commitment to both sustainability and creative financing solutions. Beyond the experience its leaders have in commercial real estate financing and C-PACE, all underwriting, due diligence, and loan servicing is retained in-house. Learn more at

C-PACE (Commercial Property Assessed Clean Energy) is a solution for property upgrades that enhance energy efficiency, incorporate renewable energy sources, save water, and bolster building resilience.

This emerging financing option gives sponsors the opportunity to refinance completed construction at a lower rate, along with offering less expensive capital that replaces new equity or mezzanine debt.

Especially in today’s volatile interest rate climate, C-PACE gives property owners a way to infuse creativity into their capital stack and reduce costs while meeting the market’s demand for sustainability.

Unique Application of C-PACE Financing: Three-Year Reimbursement Window
C-PACE’s compelling story right now is the ability to pay off variable construction debt if that construction exceeded building code. This financing not only injects much-needed liquidity into projects but also rewards sponsors for building sustainably and is generally available to properties that were constructed, or gut renovated within a three-year lookback period.

Eligible work includes energy efficiency, efficient plumbing, seismic resilience, and renewable energy improvements, which also meet sustainability benchmarks and decrease the annual operating expenses for the asset.

One recent example was a flagged hotel in the Chicago area. During COVID the owners had undergone a substantial, +$10 million renovation. The hotel, while still in ramp-up, faced a maturing renovation loan that needed to be refinanced.  To facilitate an economical refinancing, the owner utilized retroactive C-PACE, effectively infusing liquidity into the asset to help pay off the mortgage lender, and recapitalized the debt with a 25-year, non-recourse fixed-rate instrument.  

C-PACE can fit into your project’s capital stack and can adapt to your project’s unique needs

As a substitute for high-interest senior debt.

Swap expensive equity/mezzanine debt for C-PACE financing.

How C-PACE works:

C-PACE is secured and repaid through a special assessment tied to the property.

Generally, it’s limited to 20-35% of a property’s value.

Generally, allows for a three-year look back on previously completed work

The payment responsibility transfers with property ownership.

The assessment can be prepaid anytime.

Key Benefits of C-PACE Financing:

Liquidity Injection: Cash flow is the lifeblood of any project. This financing option infuses liquidity, easing financial strain, and enhancing project stability. Many clients use this injection of capital to pay down maturing mortgage debt in exchange for an extension.

Budget Overage: With retroactive C-PACE financing, you can use funds directly to cover cost overruns, ensuring your project remains financially viable.

Filling the Senior Lender Financing Gap: When senior lenders will only go to 60% LTC, C-PACE closes the gap to minimize outside equity.

In an industry that is constantly evolving, C-PACE financing is proving to be a transformative financial tool that addresses quickly changing capital markets while advancing sustainability goals. By tapping into energy efficiency dollars and allowing property owners and developers of all asset classes to reimburse themselves for past work spread financing over 20-30 years, this innovative financing mechanism empowers projects to thrive financially while making significant strides towards a greener, more sustainable built environment.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)