The Sunbelt region of the United States continues to attract hotel investors, driven by robust population growth, economic resilience, and favorable business climates. Despite tighter lending conditions, developers are turning to creative financing methods to capitalize on these opportunities.
In a recent article by Hospitality Investor, Anne Hill, Senior Vice President at Bayview PACE, discusses the increasing popularity of Commercial Property Assessed Clean Energy (C-PACE) financing in the hospitality sector. She notes that C-PACE has become mainstream, particularly in states like Texas, California, Nevada, and Florida, where legislation is well-established and markets are familiar with its benefits.
How it Works
Unlike a traditional loan, C-PACE financing is repaid via property tax assessments. This means borrowers make payments only when property taxes are due, rather than every month.
The assessment remains with the property in the event of a sale enabling sellers to provide built-in seller financing.
C-PACE financing is long-term (depending on the program, up to 30 years), fixed-rate for the duration of the term, non-recourse, and considerably cheaper than traditional mezzanine debt – without covenants and guarantees.
For a comprehensive look at how creative financing is fueling hotel development in the Sunbelt read the article here: Originally published on Hospitality Investor 4/25/25