Why Use C-PACE?
Property Owners and Developers use C-PACE financing to replace equity or mezzanine debt in their capital stack. In addition to offering a significantly lower cost of capital, C-PACE offers compelling benefits, including the ability to pass through the cost of the payments to tenants, no operating covenants, and off-balance sheet financing.
C-PACE works well with various forms of financing including traditional bank mortgage loans, federal or state historic tax credits, new markets tax credits and other tax abatement financing. RAHILL Capital is adept at working with projects that have a complex capital stack.
|MEZZANINE DEBT||C-PACE FINANCING|
|Financing term||3-5 years||20-30 years|
|Typical interest rate||8-12%||5-7%|
|Payment schedule||Monthly||Annual or semi-annual|
|Balloon payment||Yes- interest only||No – fully amortizing|
|Security interest||Borrower’s interest in the entity that owns the property||Land/property|
|Ability to transfer obligation upon sale||No||Yes|
|Ability to pass through payments to NNN tenants or hotel guests||No||Yes|
|Ability to delay first payment||No||Yes – up to 2 years post funding|
|Ability for off-balance sheet financing||No||Yes|
|Entire principal balance accelerates upon default||Yes||No|
|Includes financial/operating covenants||Yes||No|
|Requires a borrower’s guarantee||Yes||No|