Anne Hill

The biggest challenge you’ve encountered this year as a lender?

Rising interest rates continue to be the biggest challenge. They affect projects in two important ways. First, higher borrowing costs make it more difficult for new developments to pencil.

Second, they create refinancing risk because permanent financing is more expensive and often less available. Ironically, those same challenges have increased demand for C-PACE financing. 

As projects struggle to make the capital stack work, sponsors increasingly need creative financing solutions. As a balance sheet lender and part of a broader commercial real estate platform, Bayview really excels in such situations. We enjoy working with sponsors to structure transactions that otherwise might not get done. 

Another challenge is competing against financing proposals that look attractive on paper but may not ultimately be executable. In today’s market, certainty of execution is every bit as important as pricing. Borrowers are placing increasing value on lenders who can reliably deliver what they promise.

Has the can been kicked fully down the road when it comes to loan extensions, or is there more leg action to come? 

From a C-PACE perspective, we’re generally focused on new developments and recently completed assets, so we’re not as involved in legacy extension portfolios.

What we are seeing is that many projects seeking extensions are in a more difficult position than they were a year ago. Rising interest rates and more expensive permanent financing have made refinancing increasingly challenging. I don’t think we’re done seeing extension requests. 

In fact, I expect lenders will continue to receive them throughout 2027. The more important question is whether the underlying business plan still works. In many cases, simply extending a bridge loan doesn’t solve the core issue. Borrowers may need additional equity, a recapitalization, or a more creative capital solution to move the project forward. We’re finding fewer situations where an extension alone meaningfully improves the outcome.

What’s your competitive edge in deals today, and who are you competing against most often?

Our biggest competitive advantage is balance sheet flexibility. That’s a unique characteristic within the C-PACE industry and one that borrowers value because it significantly reduces execution risk. In many situations, we’re able to provide both the C-PACE financing and the construction or bridge loan, creating a turnkey financing solution. Developers appreciate having a single partner that can help structure the entire capital stack. Because we lend from our own balance sheet, it allows us to be more creative and tailor solutions to individual projects.

We also bring deep experience in the C-PACE market and can execute very quickly when sponsors are well prepared. Competition varies by property type. In hospitality, we often compete with debt funds. In multifamily, banks remain very active competitors. Regardless of the sector, borrowers consistently value certainty, flexibility and execution.

What is the most important thing you’ve done as a lender to protect your loan portfolio over the last year? 

Because a significant portion of our portfolio is construction related, we’ve spent the last year focused on construction execution risk. Everything starts with the sponsor. We want to understand whether they have the experience, track record and resources to successfully execute a project in a more challenging environment. 

We also pay close attention to the other lending and capital partners involved in the transaction. Beyond sponsor quality, we’ve increased our focus on project buy outs, contingency reserves, and interest reserves. In today’s market, we want greater certainty that a project can withstand delays or unexpected cost increases. 

If I had to summarize our approach in a single sentence, it would be this: We focus on certainty of execution. We need to make sure it can realistically be built, completed, and stabilized within the expected timeframe.

Data centers: As attractive a lending opportunity as they were two years ago?

Data centers remain an attractive sector from a demand perspective, but they’re also one of the most complex property types to finance. Today, lenders need to evaluate factors that don’t exist in many other asset classes, including power availability, political zoning and permitting approvals, equipment and labor availability for construction, and technology obsolescence.

Power availability has become particularly important. Many projects have power commitments in place, but actual delivery may still be years away. That can significantly impact project economics and timing. 

I’m also mindful of technology risk. What’s considered state of the art today may not necessarily be the preferred solution five or 10 years from now. Construction execution presents another challenge, given equipment constraints and extended delivery schedules across the industry. 

When evaluating a data center opportunity, my first questions are straightforward: Do they truly have the power? Do they have the necessary approvals? And do they have committed tenants with long-term leases? The answers to those questions largely determine whether a project is financeable.

Lightning Round:

“Traitors” or “Alone”? HGTV!

Super Bowl or World Cup? Olympics.

Best vacation you ever took? Ireland.

Sun Belt multifamily or Boston life sciences? Neither.

Book reader or phone scroller/email checker before bed? Book reader.

Describe your portfolio in one word? Growing.

Fitness activity of choice? Swimming.

Holiday wish? All deal closings finish before Christmas.

“Power” song you listen to when mentally preparing for a big event/deal/day? “Eye of the Tiger” by Survivor (I swam competitively at Princeton — pretty much our theme song!) or “Can’t Stop” by the Red Hot Chili Peppers.