Hannon Armstrong Sustainable Real Estate Announces the Closing of a $10.5 million Property
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Hannon Armstrong Sustainable Real Estate (HASRE) – a previously announced strategic alliance of Hannon Armstrong Sustainable Infrastructure Capital, Inc. ("Hannon Armstrong,") (NYSE: HASI) and Counterpointe Sustainable Real Estate, LLC (CSRE) – announced today that it has closed a $10.5 million, 25 year, Commercial Property Assessed Clean Energy (C-PACE) financing for energy efficiency measures and seismic strengthening of a new Hyatt Centric Hotel in downtown Sacramento, California.
The Hyatt Centric Hotel, which will be constructed at 1128 7th Street – the site of the landmark Hotel Clayton (built in 1911) – will be a 172 room, 11 story, 'upscale' property, adjacent to the Golden 1 Center, the home of the NBA's Sacramento Kings. The new construction will preserve and integrate the original façade of the 1911 building.
"We are very excited to play a role in financing this highly resilient and sustainable Hyatt-brand hotel," said Eric Alini, managing partner at HASRE. "As more travelers expect environmentally responsible lodging, hotel properties are an ideal use of PACE financing. Property owners can use PACE to increase guest comfort and satisfaction and preserve capital and equity at the same time," Alini continued.
By utilizing PACE instead of a larger first mortgage, Hyatt Centric was also able to save an additional $1.5 million in interest payments over three years.
CBRE Senior Vice President Marc Sallette, added, "PACE filled a very important gap in the capital stack to complete this loan and get construction of the Hyatt Centric underway. We have found it to be a great tool for hotels to take advantage of. When property owners can invest in energy efficient buildings and upgrades, it's a win-win for everybody."
"We were thrilled to work with the HASRE team to help include their PACE financing on this trophy project in downtown Sacramento," said Malcolm Davies, the Principal/Managing director of George Smith Partners. "They worked tirelessly to help educate the borrower, the corresponding lenders and the City of Sacramento on this important piece of the capital stack."
PACE programs make energy conservation and efficiency, renewable energy and seismic and water conservation improvements affordable for property owners by providing fixed-rate financing for 100% of the project and closing costs, repaid through an assessment on property tax bills.
Participation is entirely voluntary for both municipalities and property owners. A growing number of cities and counties are partnering with multiple PACE providers to increase financing choices available to consumers. Counterpointe Energy Solutions is a leading PACE Program Administrator responsible for commercial PACE programs in several states, including California.