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Ryan Bosch

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  • 3 min

The Capital Stack: PIP Timing is a Key Variable in Hotel Financing

🏠 Heading into 2026, hoteliers must synchronize Property Improvement Plan (PIP) timing with lenders to avoid transaction roadblocks. Lenders view PIPs as essential, non-optional obligations. Near-term PIPs (within 24 months) require more equity and reserves, while PIPs in the 24โ€“36 month range face stricter cash flow and liquidity requirements. For refinances with PIPs beyond loan maturity, lenders adjust their exit strategies. Owners should integrate PIPs into their business plans for better financing outcomes and leverage.
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A Critical Eye on C-PACE Loans: 5 Hidden Expenses Borrowers Should Consider

💳 Commercial Property Assessed Clean Energy (C-PACE) programs, first introduced in California in 2009, have been utilized in over 3,300 development projects across 22 states and Washington, D.C. over the last 15 years. Facing elevated interest rates and a liquidity crisis expected to persist for another 12 to 24 months, C-PACE loans are projected to gain momentum in 2024, potentially outpacing 2023. However, C-PACE loans come with considerations: capitalized interest from loan closure, fees including a 1% origination fee and third-party charges, possible rate adders of 10 basis points, and prepayment penalties ranging from 1% to 5% for up to 10 years. Despite being promoted as a cheaper alternative to mezzanine loans, C-PACE may increase costs with senior lenders.
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