DC Partners’ mixed-use development near Houston’s Buffalo Bayou Park has secured a $46.6 million loan from a funding source that rewards energy efficient projects.
Lone Star PACE, an administrator of Texas’ Property Assessed Clean Energy program, dished out over $31 million in C-PACE financing for the Thompson, a 172-key luxury hotel at 1711 Allen Parkway, according to a news release. Another $15 million was directed toward a 53,000-square-foot retail building adjacent to the hotel, at 1755 Allen Parkway.
Lone Star partnered with lender Nuveen Green Capital to facilitate the deal. The funds will help ensure “sustainable building upgrades at the Thompson and the adjacent retail pavilion,” said Lee McCormick, president of Lone Star PACE.
The Thompson Hotel anchors the Allen, a mixed-use hub that features restaurants, a health and wellness club and a 99-unit condo building.
DC Partners’ C-PACE financing allowed it to “not only retire construction debt, but also to make a lasting investment in both our building and the environment,” said company CEO Roberto Contreras.
C-PACE funding has become increasingly common over the past year as banks have been reluctant to provide commercial real estate loans, hindering developments and sales across much of the nation. High interest rates have also steered many investors toward PACE programs due to their low rates, long terms and fixed rates.
To qualify for C-PACE financing, projects must meet certain energy efficiency and renewable energy standards.
Numerous Texas developers have hopped on the bandwagon. Dallas-based Centurion American secured $24.4 million in PACE financing earlier this week for redevelopment of Plano’s Collin Creek Mall. In April, Neway Hospitality received $11.3 million from Lone Star PACE for a 175-room hotel project near Minute Maid Park in Houston.
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