Petrospectives

C-PACE: A Strategic Tool for CRE’s Debt Maturity Wave

Posted by Petros on November 1, 2025

By Petros PACE

The CRE market is still seeing a large debt “maturity wave”. C-PACE can be used strategically upon construction completion for loan modifications and takeouts, helping to minimize the impacts of higher interest rates, lower property valuations and longer stabilization periods.

Extend Runway for Sale or Refinance
By injecting flexible capital into a project, C-PACE can support a borrower through lease-up or market stabilization, improving optionality and timing for future disposition or refinancing.

Recapture Recently Incurred Costs
C-PACE can be used retroactively to reimburse owners for eligible improvements made in the past 2-4 years, including the cost of new construction.

Reduce Weighted Average Cost of Capital
By replacing higher-cost bridge, mezzanine, or preferred equity with low-cost C-PACE, borrowers can lower the overall cost of capital on recently completed assets.

Non-Recourse, Off-Balance Sheet Structure
C-PACE is secured by a special property tax assessment and is non-recourse, allowing for capital restructuring without adding traditional debt to the balance sheet.

Prepayment Optionality
Flexible prepayment terms make it easier to exit or refinance (no lockout period) while also offering the ability to leave C-PACE in place long term.

Improves Cash Flow
Long amortization periods of up to 30 years result in low annual payments, enhancing property cash flow and potentially improving DSCR.