[[{“value”:”
**Where C-PACE Financing Creates an Edge in Multifamily — Insights from Loren Biller**
Some developers may overlook C-PACE financing when planning multifamily projects simply because they are more familiar with traditional options like senior debt or equity. Loren Biller, Senior Vice President of Originations at PACE Loan Group, is set to speak at the upcoming Connect Southeast Multifamily event on December 4th in Key Biscayne. Ahead of the event, he shared key insights on how C-PACE financing is transforming the multifamily capital stack and creating value in today’s evolving real estate landscape.
**How is C-PACE financing changing the capital stack for multifamily developments?**
C-PACE financing has become a versatile tool across commercial asset classes, including multifamily. It serves functions such as filling gaps in senior loan proceeds, reducing the cost of high-yield bridge loans, and paying down maturing construction debt. In one recent deal, PACE Loan Group provided funds to pay down a developer’s senior loan, which freed up a lending commitment with their bank for future projects. In Philadelphia, C-PACE was used to complete a multifamily project’s capital stack while lowering the overall cost of capital. According to Biller, “C-PACE really is the chameleon of the capital stack.”
**Can you share a recent example in Florida or the Southeast where C-PACE played a critical role?**
Adaptative reuse and conversion projects are where C-PACE especially shines. For instance, PACE Loan Group provided financing for the conversion of a hotel into attainable workforce housing near Disney World, a project called Infiniti Lofts. In this case, C-PACE financing increased the borrower’s leverage, improved the cost of capital, and reduced recourse. C-PACE is particularly well-suited for conversion projects like this—and like The Stella, an office-to-multifamily transformation in the Twin Cities—because it finances essential systems like HVAC, plumbing, and electrical infrastructure, with terms that can extend up to 30 years.
**How does C-PACE fit between senior debt, mezzanine, and equity in multifamily deals today, and how receptive are lenders?**
C-PACE functions as a tax lien, which means senior lender consent is required. Encouragingly, lender receptiveness is increasing. As of September, there was a 21% year-over-year increase in deals featuring new consenting lenders, with over 100 new lenders engaging with C-PACE financing in the past year. Local banks and credit unions account for more than 50% of these deals, though private lenders and debt funds have grown their participation to 18-20% of the market. Biller adds, “C-PACE can pair with a wide variety of mortgage debt — we’ve worked on deals with A-notes, credit unions, and banks alike.”
Although equity remains a hot topic among investors and developers, Biller emphasizes that C-PACE remains a more cost-effective alternative to mezzanine debt and preferred equity, especially in today’s interest rate environment.
**How are sustainability and ESG considerations creating new opportunities (or challenges) for developers?**
While C-PACE isn’t reserved only for green projects, it supports most operational and infrastructure components if the building meets code. The emerging timelines for federal clean energy credits and the One Big Beautiful Bill (OBBB) are expected to drive interest in renewable and energy-efficient improvements. Projects must begin before July 4, 2026, and be operational by January 1, 2027, to qualify for key tax credits. These upgrades can be fully financed with C-PACE, and eligible borrowers can directly benefit from the tax credits, creating a compelling incentive to act now.
**What are the common hurdles when introducing C-PACE into underwriting and closing?**
Lender consent remains the primary hurdle, which is largely a matter of education. According to Biller, here are the key reasons lenders are coming around:
– Reduced exposure for mortgage lenders
– Expanded deal capacity for mortgage lenders
– No need for participant banks
– Ability to pay down or replace existing construction loans
**Looking ahead to 2026 and beyond, how do you see C-PACE evolving in the Southeast multifamily market?**
Biller predicts continued growth for C-PACE and similar alternative financing structures across the Southeast and nationally, especially amid ongoing market volatility. “We’re seeing borrowers and lenders using C-PACE more and more,” he says. “And we don’t see that interest fading any time soon. C-PACE is here to stay.”
“}]]
