Counterpointe Sustainable Real Estate Closes $12 Million C-PACE Financing for "Tommie Hotel" Now under construction in Hollywood
by Adam Moskowitz | July 8, 2019 | Press Releases
Greenwich, CT (July 8, 2019) — Counterpointe Sustainable Real Estate announced today that it has closed a $12 million, 30-year, Commercial Property Assessed Clean Energy (C-PACE) financing through its Hannon Armstrong Sustainable Real Estate brand in support of the construction of the new Tommie Hotel, located between Hollywood and Sunset Boulevards in downtown Hollywood, California.
The Tommie Hotel, under construction by the Relevant Group, is one of several investments the developer is making in Hollywood. The boutique luxury hotel, designed for the Hyatt brand, is rising in a former parking lot to reach eight stories tall, and will feature 212 guest rooms and rooftop amenities including a pool.
At the building’s core is a seismic event resilient foundation and framing design that qualified the project for commercial PACE funding. In much of California, state and county legislation allows for the finance of energy efficiency and renewable building infrastructure as well as seismic resilience measures through a special tax assessment by private lenders such as Hannon Armstrong Sustainable Real Estate.
“We’re building something to capture the momentum and growth this neighborhood is experiencing, but we are thinking long-term too,” stated Warren Cruz, chief accounting officer of the Relevant Group. “Guests will see and experience luxury, but in LA, our buildings begin with the seismic event resistant structure and finish with green roof elements, LED lighting and top of the line environmental controls.”
Counterpointe Sustainable Real Estate, a specialty commercial PACE lender, provided $12 million at a fixed rate for 30 years. The private capital supplemented EB5 funding and removed interest rate and term risk for nearly 12% of the $103 million development.
“Helping to bring projects such as this to life while generating quality assets is a core function of commercial PACE financing,” says Eric J. Alini, Managing Partner of Counterpointe Sustainable Real Estate. “PACE financing for commercial buildings has been well-known for retrofits, but it is equally advantageous for new construction because it can cover elements such as seismic as well as infrastructure, such as lighting, HVAC and renewables,” he added.
Shawn Heyl, president and founder of Green PACE Financial who advised on the project, advocates for widespread commercial use of PACE financing.
“New construction projects such as the Tommie Hotel are strong candidates for commercial PACE financing because the assessment structure and low cost of capital helps developers and property owners purchase the most efficient and resilient materials,” stated Heyl.
Counterpointe Energy Solutions (CES) acted as PACE Program Administrator for the funding provided by Counterpointe Sustainable Real Estate as part of the California Statewide Communities Development Authority (CSCDA) PACE program.
C.J. De Santis, Head of Government Relations for Counterpointe Energy Solutions added, “We are pleased to see our partnership with Los Angeles yield a positive outcome for a business district and developer. We look forward to similar results from partnerships with additional California cities and counties to help with their building infrastructure and renewable upgrades as well."
Commercial Property Assessed Clean Energy (C-PACE) financing is provided through a public-private partnership that helps local governments and the private sector fund sustainable and resiliency improvements in commercial properties.