Ares has committed up to $300m to a new C-PACE financing vehicle with Clearwater PACE, as private credit investors expand into alternative real estate lending strategies.

The vehicle, backed by Ares Alternative Credit funds, will enable Clearwater to deploy balance sheet capital into large-scale commercial real estate projects, targeting financings across hospitality, multifamily, mixed-use, and adaptive reuse assets.

C-PACE is a financing model that allows property owners to fund energy efficiency and sustainability improvements through tax-linked assessments, creating long-duration, senior-secured loans with stable return profiles.

The platform is designed to target transactions of $5m or more, with typical deal sizes ranging between $40m and $50m, and will support borrowers across more than 40 US states. As traditional real estate capital markets continue to adjust, C-PACE is increasingly being used alongside senior debt, mezzanine financing, and preferred equity to optimise capital structures.

“This initial close validates the institutional demand for C-PACE loans and further positions Clearwater to capture meaningful market share in an asset class that exceeded $3bn of origination volume in 2025,” said Jonathan Seabolt, CEO of Clearwater.

The initiative also marks a broader expansion of AXCS Capital’s platform, with C-PACE emerging as a core pillar in its strategy to deliver structured financing solutions to real estate sponsors and institutional investors.

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