Deer Valley, Utah, September 19, 2025
News Summary
A new large-asset C-PACE financing product provides fixed-rate, balance-sheet funded capital intended as an alternative to bridge loans and mezzanine debt. The structure lets borrowers defer debt service for up to four years during construction or lease-up and offers flexible prepayment, including par prepayment after five years and reduced penalties beginning in year three. The product launched with a $63.3 million C-PACE financing for a mixed-use resort in Deer Valley, covering roughly 42% of construction costs. It targets institutional-scale projects, helps lower weighted average cost of capital, and supports energy upgrades and construction stabilization.
New large-asset C-PACE product offers fixed-rate, lower-cost short-term capital with deferred payments and flexible prepayment
C-PACE financing has a new option aimed at large commercial projects that need lower-cost, short-term capital with flexible payback choices. The product is a fixed-rate, balance-sheet funded solution meant to act as an alternative to bridge loans and mezzanine debt. It allows developers to defer debt service during construction or lease-up for up to four years and to prepay on flexible terms — including the ability to prepay at par after five years with minimal penalties beginning as early as year three.
Key deal shows proof of concept
The product’s launch was paired with a recently completed mid-construction recapitalization: a $63.3 million fixed-rate C-PACE financing for the SkyRidge Resort, a mixed-use luxury hospitality development in Deer Valley, Utah. That financing covered roughly 42% of the project’s construction budget and helped the sponsor lower the overall weighted average cost of capital while funding remaining construction of a lodge, clubhouse and resort amenities.
What the product does and why it matters
The new financing option is built on the C-PACE model and is aimed at projects that need short-term stability in a high-rate environment. It offers spreads that begin in the high 200s over the 10-year U.S. Treasury and locks in a long-term fixed rate that can replace costlier short-term solutions. The structure removes immediate refinance pressure and lets owners refinance when market conditions improve.
Borrowers can delay debt service up to four years to get through construction or lease-up phases without the strain of immediate payments. The product is designed to be scalable for large projects and to allow sponsors to complete construction, stabilize assets, cover cost overruns, fund interest reserves, or reshuffle the capital stack.
How prepayment works
The prepayment design is intentionally flexible to match changing market needs. On one hand, sponsors can prepay at par on a short-duration basis — useful when a refinance opportunity appears quickly. On the other hand, the formal schedule allows prepayment at par after five years, with reduced penalties that can begin as early as year three. That flexibility positions the product as a lower-cost interim tool compared with bridge or mezzanine financing that often carries higher costs or steeper prepayment penalties.
Market context
The product arrives amid elevated interest rates and a heavy slate of maturing commercial loans. Nearly $1 trillion of commercial debt is set to mature in 2025, creating demand for flexible recapitalization options. C-PACE has become more visible as banks tighten underwriting and shorten loan terms; the resulting funding gap has driven some owners to seek other long-term, fixed-rate capital sources that reduce refinance risk.
Adoption, scale and underwriting
C-PACE is now enabled in about 40 states, and total C-PACE lending reached nearly $10 billion by the end of 2024. Lenders and institutional borrowers increasingly treat C-PACE as a practical tool for many asset classes. Senior lenders have moved from skepticism to acceptance in many cases, viewing well-structured C-PACE as accretive and sometimes preferable to loan participations that share client information with other banks.
The new large-asset product is offered by a balance-sheet lender with committed capital and the ability to write larger checks, which is important for institutional-scale projects. The approach also ties into value drivers such as lower overall cost of capital when C-PACE replaces preferred equity or mezzanine debt, and longer-term stability through fixed-rate financing for 20–30 years in many C-PACE structures.
SkyRidge Resort details and energy upgrades
SkyRidge Resort’s development includes a six-story anchor lodge called the Stelle Lodge, a Topgolf®-branded 18-hole golf course, a clubhouse, event spaces, an equestrian center with private trails, fine dining with an Argentinian culinary focus, a rooftop bar and deck, a spa, pool, fitness center and exclusive community amenities. By qualifying for a proprietary low-carbon certification, the developer secured lower financing rates and additional energy savings through upgrades to the building envelope, HVAC, lighting, plumbing and electrical systems.
Use cases and benefits
- Mid-construction recapitalization: Replace or partially pay down senior debt to get breathing room during construction.
- Stabilization financing: Extend time to lease up and stabilize cash flow.
- Cost overrun and reserve funding: Add capital to cover unexpected costs or fund interest reserves.
- Capital stack reshuffle: Substitute C-PACE for higher-cost capital layers to lower overall cost of capital.
Background and history
Property-assessed clean energy financing originated roughly two decades ago and has since expanded into commercial real estate across many states. Today’s growth is driven by tighter bank underwriting, an interest-rate environment that favors long-term fixed pricing, and growing awareness of C-PACE recapitalization uses.
Frequently asked questions
What is this large-asset C-PACE product?
It is a fixed-rate, balance-sheet funded C-PACE financing option designed for large commercial projects that need lower-cost, short-term capital with flexible prepayment and up to four years of payment deferral.
Who can use it?
Developers and owners of large construction and mixed-use projects, including those already under construction and new developments, can use it to complete work, stabilize assets, or reshuffle capital stacks.
How does the payment deferral work?
Borrowers can defer debt service for up to four years during construction or lease-up phases, which reduces immediate cash flow pressure while the project is not fully producing revenue.
What are the prepayment terms?
Prepayment is flexible. The structure allows prepaying at par after five years, with minimal penalties starting as early as year three. Short-duration par prepayments are also possible when market conditions permit.
How does it compare with bridge or mezzanine loans?
It aims to be a lower-cost alternative by offering fixed-rate financing with deferment and more flexible prepayment, potentially lowering the overall weighted average cost of capital versus bridge or mezzanine options.
Where is C-PACE available?
C-PACE programs are enabled in about 40 states across the U.S.
Is there a recent example of this product in use?
Yes. A mixed-use resort project in Utah received a $63.3 million fixed-rate C-PACE loan that covered about 42% of the construction budget and helped finance a lodge, clubhouse and resort amenities.
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Key features at a glance
| Feature | Detail |
|---|---|
| Product type | C-PACE large-asset fixed-rate financing |
| Rate | Fixed rate; spreads start in the high 200s over 10-year U.S. Treasury |
| Payment deferral | Up to 4 years during construction or lease-up |
| Prepayment | Prepay at par after 5 years; minimal penalties as early as year 3; short-duration par prepayments possible |
| Use cases | Recap mid-construction, cover cost overruns, fund reserves, stabilize assets, reshuffle capital stacks |
| Sample deal | $63.3M for SkyRidge Resort (covers ~42% of construction budget) |
| Geographic reach | Available where C-PACE is enabled (about 40 states) |
| Industry scale | Nearly $10B in C-PACE lending by end of 2024 |
Deeper Dive: News & Info About This Topic
Additional Resources
- Boston Real Estate Times: Pace Equity unveils flexible large-asset financing product
- Wikipedia: Property-assessed clean energy (PACE)
- Mile High CRE: Pace Equity launches flexible large-asset financing product
- Google Search: C-PACE financing
- ConnectCRE: Pace Equity Group’s Andrew Freter on C-PACE as a financing source
- Google Scholar: Commercial PACE financing
- ConnectCRE: Deer Valley resort obtains $63.3M C-PACE loan
- Encyclopedia Britannica: Property-assessed clean energy
- PR Newswire: Petros PACE Finance closes $153M C-PACE deal
- Google News: C-PACE financing
Author: Construction FL News
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