Peachtree Group CPACE loan
PEACHTREE GROUP RECENTLY originated its first commercial property assessed clean energy financing in Tennessee, providing a $10.7 million loan for a Class-A office development in Nashville.
Nashville's Division Street Development is developing the four-story, 75,000-square-foot project, slated for completion by October 2024, Peachtree said in a statement.
“For eligible projects, CPACE financing remains one of the most attractive options to bring a project to completion,” said Jared Schlosser, Peachtree’s executive vice president and head of CPACE. “We are pleased to assist Division Street Development in securing the final piece needed to complete the financing puzzle for their office development.”
Peachtree is led by Greg Friedman as managing principal and CEO, with Jatin Desai serving as managing principal and CFO and Mitul Patel as principal.
The Division Street Development project is one of the first properties in Nashville and Davidson County to use CPACE, the statement said. The office project is between Nashville's central business district and the Wedgewood-Houston district. The 30-year CPACE financing will fund the office's lighting, building envelope, HVAC, plumbing and roof with a combination of retroactive and future funding.
The Tennessee State legislature passed CPACE enabling legislation in 2021, permitting counties or cities to establish CPACE programs. Property owners in Tennessee can utilize CPACE financing up to 25 percent loan-to-value, providing a flexible and sustainable financing option.
According to Peachtree, office and commercial real estate owners face challenging years ahead, with trillions of dollars in maturing debt and increasingly difficult refinancing due to tightened bank lending standards. CPACE programs provide property owners a unique opportunity to finance upfront costs for energy or other eligible improvements on a property. Repayment occurs over time through a voluntary assessment, as outlined by the U.S. Department of Energy.
Peachtree Group Credit provides direct lending for permanent loans, bridge loans, mezzanine loans, CPACE financing, and preferred equity across all commercial real estate sectors. In June, Peachtree issued a $40 million retroactive CPACE loan to BLG San Diego LLC for the new 147-room AC Hotel San Diego Downtown Gaslamp Quarter.
