We surveyed some leaders in the real estate industry to tell us what they foresee for the C-PACE market in 2025. We asked, “What are your overall predictions for C-PACE lending this year? What will be the biggest changes/trends for C-PACE lending this year versus years past?”
Here’s what they had to say.
Joe Euphrat, Co-Founder/Managing Principal, GreenRock Capital
We expect the volume of C-PACE lending this year to significantly exceed last year’s volume. We are seeing a continuing trend of more awareness and understanding, especially among institutional CRE owners. We are also encouraged in the trend-line of senior lenders who are more comfortable co-existing with C-PACE financing.
I think we will see some spread compression and continued growth of C-PACE both as part of new construction/development and as part of recapitalization strategies in the CRE arena —overall, a very strong trend-line.
Mansoor Ghori, Founder/CEO, Petros PACE Finance
2025 has been off to a strong start, and if momentum continues, I believe the C-PACE industry will surpass $3 billion in originations by the end of the year. Average deal sizes are growing, institutional adoption is increasing, and there are still more untapped opportunities for product development. At Petros, we’ve closed C-PACE financing for condos and have unitranche deals in the pipeline, while other providers are exploring opportunities in rural markets. As the industry evolves, both new innovations and proven benefits will drive C-PACE past the $3 billion milestone and beyond.
The C-PACE market is moving upstream, with more capital flowing to large deals and a growing divide among lenders. Some, like us at Petros, will remain committed to middle-market and large institutional transactions, while others will focus on smaller deals. This year will also bring a shift in project types, with more property conversions than in years past. Office-to-condo and office-to-multifamily projects are increasing, and even some industrial properties are being repurposed as condos or offices. 2025 is shaping up to be a big year for adaptive reuse and redevelopment.
Aaron Kraus, Managing Director, Head of Market Development and Strategy, Nuveen Green Capital
The C-PACE Alliance, a C-PACE trade association, recently published 2024 data showing nearly $2.6 billion of C-PACE closings in 2024. While broader economic challenges are afoot, the industry certainly can top that this year — especially when you consider that deal sizes continue to increase. In fact, we can expect more than $100 million+ deals this year. The demand for the efficient capital that C-PACE brings to the table shows no sign of abating.
I think we will see the continuation of a longstanding trend which is the further institutionalization of C-PACE as an asset class. We are seeing more sophisticated sponsors. We are seeing more complicated deals. We are seeing larger check sizes. C-PACE has crossed the $10 billion mark — and this line is important because I think C-PACE has really arrived as a force in the capital markets. You used to walk into a conference and 5% of the participants would know about C-PACE. That number is now north of 50%. While there are macro-economic factors that could impact us in any given year, I think the broad tailwinds of C-PACE growth will continue over the long term.
Jared Schlosser, EVP, Head of Hotel Originations/CPACE, Peachtree Group
C-PACE lending is expected to continue its strong growth trajectory, with Peachtree Group projecting a 15% to 25% increase in originations year-over-year. Several factors are fueling this expansion. Increased market adoption remains a primary driver, as more states — particularly in the Southeast and Pacific Northwest — implement and ramp up C-PACE programs. Additionally, liquidity gaps in traditional lending have positioned C-PACE as an attractive alternative, especially as banks remain cautious about construction financing.
The program’s favorable financing terms — including long-term, fixed-rate and fully assumable loans — make it an appealing option for borrowers seeking stability and flexibility. Furthermore, some lenders, including Peachtree Group, are integrating C-PACE with senior loans, offering a bundled financing solution that simplifies deal structuring for developers. Lastly, macroeconomic factors such as persistent high interest rates and inflationary pressures on construction costs continue to drive demand for alternative financing solutions like C-PACE. As a result, C-PACE is becoming an increasingly vital tool in today’s lending environment.
One of the most significant trends this year is the expansion of C-PACE financing beyond its traditional use in hotels, multifamily and office properties to include build-for-rent (BFR) communities and large-scale infrastructure projects such as sports stadiums. The increasing application of C-PACE in BFR developments reflects shifting housing market dynamics, particularly as homeownership remains out of reach for many due to high costs and interest rates.
Another key trend is the growing use of retroactive C-PACE financing, particularly by hospitality borrowers seeking to reimburse past construction expenses for projects that faced liquidity challenges. Overall, C-PACE lending is poised for continued growth as legislative expansion, shifting borrower strategies and evolving market conditions drive wider adoption and deeper integration within the capital stack.
