Rafi Golberstein, CEO, PACE Loan Group

In an interview with Invest:, Rafi Golberstein, CEO of PACE Loan Group, discussed the company’s growth, industry trends, and market dynamics in the Twin Cities.

Over the past year, what have been some of the main highlights and key milestones for the company?

Over the past year, some of the key highlights for PACE Loan Group, or PLG, include being named one of the “Best Places to Work in Minneapolis–Saint Paul” by the Business Journal. This was a big honor for us because, unlike many other accolades, this one is based purely on employee surveys—we had no influence over the results. It was truly affirming to see that our employees enjoy working here.

We were also named, for the second year in a row, to the Fast 50 list also from the MSP Business Journal, which recognizes the 50 fastest-growing private companies in the metro area.

Lastly, we relocated our office back to downtown Minneapolis. During COVID, we moved temporarily to the suburbs, but as of January 2024, we are officially back downtown. This has been an exciting and important step for us.

Why do you think PLG has become one of the fastest-growing companies?

Our industry—C-PACE—is growing rapidly. We were early adopters, becoming one of the original PACE lenders in the country back in 2017. At the time, the concept was not widely understood or fully embraced, but we believed in it from the start. Fortunately, our confidence in the model proved to be right, and the industry has since experienced exponential growth year after year. That growth is directly reflected in PLG’s success.

What is your current outlook on the commercial real estate finance industry in the Twin Cities?

From my perspective, the Twin Cities market remains an attractive market for investment. Nationally, Minneapolis–Saint Paul is seen as a stable market with room for revenue growth. However, when you break it down further, there are key differences between the suburbs and the cities of Minneapolis and Saint Paul themselves.

Minneapolis and Saint Paul have some areas that are thriving and others that are slower. A major challenge remains the downtown central business district (CBD) office market, which continues to struggle. This has had ripple effects throughout the broader market. However, there are promising developments, and while revitalization will take time, we are seeing positive momentum.

That being said, apartment fundamentals remain strong in both the city and the suburbs. There has been considerable discussion around rent control policies in Minneapolis and Saint Paul, but in my experience, its impact has been somewhat overstated. We continue to actively finance projects in both cities as well as the surrounding suburbs, so we remain deeply engaged in this market.

Which segments of the industry are currently driving growth?

For PLG, our top three national asset classes within commercial real estate are market-rate apartments, senior living facilities, and hotels. This trend holds true in the Minneapolis–Saint Paul area as well.

For example, in December 2024, we closed a $16 million loan in downtown Saint Paul to convert a vacant, outdated office building into apartments. We also previously provided a $20 million loan for The Four Seasons Hotel in downtown Minneapolis. Additionally, we do a lot of financing in the senior living space.

We would love to do more industrial deals, but they are more challenging for us to compete. Industrial remains one of the hottest real estate segments in the financing market, and as a result, the cost of capital for these projects is lower, making it less of a fit for our lending model.

While ESG is inherently tied to your business model, could you elaborate on how PLG integrates these principles into its work?

PACE, by nature, is an ESG-driven product. Every deal we finance must incorporate energy efficiency, renewable energy, building resiliency, or carbon reduction. While some projects are more intentional in their ESG impact than others, sustainability is always embedded in what we do.

For example, we financed the PAE Building in Portland, Oregon, which is the largest living building in North America—a clear statement of sustainability. Other projects may be more straightforward, like apartment developments incorporating high-efficiency systems.

Beyond environmental sustainability, we are also deeply committed to diversity, equity, and inclusion. The commercial real estate industry has traditionally been dominated by white men, particularly on Wall Street. When I founded PLG in 2017, I saw an opportunity to break that mold by actively hiring and developing a diverse team. Even if our employees eventually move on to other opportunities, we want to help create a more diverse talent pipeline for commercial real estate.

Would you say the Green Buildings Initiative trend is still in its early stages here, or is it more developed?

Cities like New York and Seattle have clear mandates for energy efficiency, such as requiring all-electric buildings. In contrast, the Twin Cities don’t have the same level of policy enforcement. Minneapolis and Saint Paul are separately governed, each with its own mayor and city council, and state-level initiatives vary as well.

There is plenty of discussion around sustainability initiatives, but I haven’t seen concrete actions at the same scale as in New York or Seattle. Given the current political landscape, I think it will be difficult to pass a statewide mandate anytime soon.

How does PLG work with government representatives at the city, county, and state levels to promote these initiatives?

We work primarily at the state level, not just in Minnesota but across the country, because PACE is legislated on a state-by-state basis. Last year, we successfully lobbied for an amendment to Minnesota’s PACE statute to expand eligible projects to include building resiliency and carbon reduction. We’ve worked with both Democratic and Republican state legislatures, as PACE is a rare bipartisan issue—it appeals to environmental advocates while also serving as an economic development tool without requiring public funds.

What’s your outlook for PLG in the next two to three years in the Twin Cities?

I expect continued growth in our local presence. Currently, about half of our staff is based in Minnesota, with the rest in San Diego, New York, and Chicago. As we expand, I anticipate hiring more employees here, particularly for back-office functions. Additionally, I expect to see even larger C-PACE loans being completed in Minnesota.