Carlyle Commits $1B to North Bridge for C-PACE Financing

Carlyle, the global investment firm, has made a strategic investment into North Bridge ESG LLC, a provider of real estate financing, along with a commitment to provide as much as $1 billion to facilitate the origination of commercial property assessed clean energy (C-PACE) loans by North Bridge.

The partnership reportedly is intended to let North Bridge address evolving market needs on a larger scale.

In the Monday announcement, North Bridge founder & CEO Laura Rapaport described Carlyle’s $1 billion commitment to C-PACE as the company’s largest to date.

North Bridge provides C-PACE financing to institutional borrowers in major markets across the U.S. C-PACE is a fixed-rate financing option that is secured by local property assessments. As a private credit option with flexible terms, C-PACE is gaining popularity for its ability to enhance CRE capital stacks with accretive benefits. The financing can be applied to new construction projects, renovations, acquisitions, and even retroactively for recapitalization opportunities.

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As a recent example of the kinds of C-PACE financing North Bridge handles, a company spokesperson cited a $42.7 million C-PACE loan in December 2022 related to the Newport Beachside Hotel & Resort in Sunny Isles, Fla. The money went toward renovations of the pool, beachfront amenities, HVAC, low-flow plumbing, impact glass (hurricane glass) and seawall restoration. This reportedly was the largest C-PACE deal in Florida to that date.

This transaction was a joint effort between Carlyle’s Credit Strategic Solutions and Private Credit teams.

Paul Hastings LLP served as legal advisor to Carlyle in connection with this transaction. Latham & Watkins LLP and Chapman and Cutler LLP served as legal advisors to North Bridge.

CRE’s jalapeños?

Right now, C-PACE is managing to be both green and hot.

In March, Commercial Property Executive provided an update on the surge in C-PACE financing, with both numbers of loans and average loan sizes growing rapidly. 

Just a few weeks ago, we spoke with Rapaport about her career and how she came to focus on improving the built environment through funding solutions—like C-PACE—that enhance sustainability.

Barely a week later, we interviewed Ryan Doyle, senior director of originations at Nuveen Green Capital, about the ongoing expansion of C-PACE enabling legislation around the U.S., including Georgia.