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PACE funding is a great option for your hotel development project.

PACE funding has been around for years, but has gained new traction and popularity since the pandemic. What many property owners don’t realize is that this type of financing is a great option for development, including for the hospitality industry. 

Hotel development requires a lot of capital, and it’s critical to choose the lowest cost financing available for your project. PACE is a great way to add capital for a low-cost, long-term option. In this article, we’ll explain how you can use commercial PACE for hotel development

What is PACE Funding?

CPACE financing stands for commercial property assessed clean energy financing. This means that it is a special type of financing that is repaid through property assessments, rather than monthly loan repayments. 

PACE funding offers many benefits. It is low cost and also offers long terms, even up to 30 years. It’s also non-recourse with no personal guarantees and you can benefit from interest only periods through construction. 

In addition, PACE repayments are transferred with the sale of the property. So, if the ultimate goal is to sell after construction completion, then the loan transfers to the organization that purchases the property. 

You can get PACE funding for up to 25% of the loan to value of the property based on energy efficient features and additions. Many of these features you would already include in your development plans, since they’re better for the environment and likely will save on operating costs. For instance, low flow plumbing fixtures, efficient boiler systems, and LED lighting.

Why Use CPACE Financing for Hotel Development?

Because of the many key advantages of CPACE financing, it can be a favorable option for your capital stack. During construction, typically the senior debt comes with relatively high interest rates and shorter terms. 

PACE funding is a great way to bridge gaps and get more capital to finish your hotel development project. That’s why many hotels are choosing PACE to assist with the costs of construction.

Your PACE lenders can even work with you to find financing opportunities without changing the scope of your project. Our team maintains close relationships with PACE administrators and offers years of experience for CPACE lending. This means that we have expertise on requirements and qualifications processes. 

What’s more, hotel features included for PACE funding often save you money and are great for marketing. Green buildings are in due to increasing awareness around environmental concerns. So, investing in efficient building features can help draw attention to the hotel. Those same features that you can get PACE financing for and offer good PR also provide you with cost savings for operations by decreasing water and energy consumption. Therefore, it’s truly a win-win choosing PACE for your hotel development project.

Stonehill: Your Trusted PACE Lenders

When you need commercial PACE financing, choose our team at Stonehill PACE. We offer years of experience designing and funding loans specifically designed for your needs. Our team works closely with you to ensure you receive the lending solutions you need for constructions and renovations. Contact us today to discuss your financing needs with our seasoned professionals.