Carlyle buys stake in real estate finance company North Bridge

CARLYLE is buying a minority stake in North Bridge, a finance company that focuses on a type of private credit lending to landlords for clean energy projects. 

The transaction also includes Carlyle committing up to US$1 billion to help North Bridge make loans, indicated a statement.

North Bridge focuses on putting together what are known as commercial property assessed clean energy (C-Pace) loans, that real estate owners and operators can use to make upgrades to properties, recapitalise existing holdings, or fund new construction projects, among others.

Payments added to the landlord’s property tax bill then pay off the loan over time.    

Banks in recent years have been retreating from commercial real estate lending, leaving assets that need financing, said Laura Rapaport, North Bridge’s founder and chief executive officer.

On top of that, more states are adopting legislation for C-Pace loans, while demand for sustainable property development is growing, she added. About 40 US states and Washington DC have laws allowing the financing.  

“It’s really those three things combined that make it the perfect storm to be a capital markets solution,” Rapaport said. 

Head of credit strategic solutions at Carlyle Akhil Bansal said: “For Carlyle, the investment in North Bridge and the agreement to provide money for future loans is a way to put investor dollars to work in an asset class considered relatively low risk, and one that’s expected to grow.”

Carlyle is making the transaction through its credit strategic solutions and private credit teams.  

“If you look at the market opportunity in front of North Bridge, just given the size of the commercial real estate market, 40 states, applicability to all these types of real estate, new construction, refinance – that’s a massive market opportunity,” Bansal noted.

The law firm Paul Hastings advised Carlyle, while Latham & Watkins, and Chapman and Cutler advised North Bridge. BLOOMBERG