North Bridge’s Nashville Loan Sets Road Map for C-PACE Construction Financing

North Bridge’s latest Commercial Property Assessed Clean Energy (C-PACE) deal made history and established a potential blueprint for developers financing future construction projects.

The alternative lender originated $13.8 million of C-PACE debt alongside a $25 million senior loan from Old National Bank for the ground-up development of a multifamily project in Nashville. The North Bridge portion of the capital stack for co-developers Aria Development Group and Wedgewood Avenue was structured as the first delayed-draw C-PACE financing in Tennessee history and just the second transaction of its kind ever.

Laura Rapaport, founder and CEO of North Bridge, implemented the C-PACE industry’s first delayed-draw deal in early 2025 with a $108 million construction loan for Fisher Brothers to expand its Area15 District complex on the Las Vegas Strip. The structure is designed to create increased flexibility during the construction process by allowing a borrower to draw funds when needed without having to pay interest on the full amount. 

“We were able to create a structure that really focuses on what the borrower needs and how to reduce the overall cost of capital so that the structure is most accretive to everybody,” Rapaport told Commercial Observer. “Having a structure that can work with the borrower and lender to build the most effective project is something that is going to be used more and more because that’s the most effective way to use the financing on the go-forward basis.”

The Tennessean first reported the transaction. 

The financing package for the Pike rental apartment project also includes preferred equity from Eldridge Acre Partners along with common equity from Aria Development Group and Wedgewood Avenue. 

Located at 1411–1413 Dickerson Pike three miles north of Downtown Nashville, the Pike will also include 3,000 square feet of ground-floor retail. The development is slated for completion in 2027 as the first phase of a master-planned, 12-acre, mixed-use community that Aria and Wedgewood are developing.

“C-PACE provided long-term, fixed-rate, nonrecourse financing that enhanced the overall strength and durability of the capital stack,” Beau Fowler, managing principal at Wedgewood Avenue, said in a statement. “Its structural advantages made it an ideal complement to the senior loan and equity, supporting the successful execution of the development.”

The Nashville deal was closed two months after North Bridge executed the first New York City multifamily C-PACE multifamily loan with $8.5 million of debt supplied to JEMB Realty for capital upgrades of Herald Towers in Midtown Manhattan. Rapaport said there is a strong opportunity in the marketplace for other multifamily C-PACE loans either for renovations or new construction on a retroactive basis given that the look-back period is three years in most states. 

Rappaport said the delayed draw used in the Nashville apartments project underscores the evolution of C-PACE construction financing from borrowers drawing down a loan on tranches. 

“While the tranching structure certainly helped advance the construction financing for C-PACE in a meaningful way, it still falls short of the reality of actuals versus accrued and how people truly draw dollars,” Rapaport said. “We can give the borrower money as they need it so they’re not taking too little or too much.”

Andrew Coen can be reached at acoen@commercialobserver.com.