Greenwich, CT (July 8, 2019) — Hannon Armstrong Sustainable Real Estate (HASRE) announces that it has closed a $12 million, 30-year, Commercial Property Assessed Clean Energy (C-PACE) financing 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.”
Hannon Armstrong 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 Hannon Armstrong 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 LLC acted as PACE Program Administrator for the funding provided by Hannon Armstrong Sustainable Real Estate. The Tommie deal follows Hannon Armstrong Sustainable Real Estate funding and Counterpointe’s administration of $10.5 million in energy efficiency measures and seismic strengthening of the Hyatt Centric Hotel in downtown Sacramento, California.
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.
About Hannon Armstrong Sustainable Real Estate
Hannon Armstrong Sustainable Real Estate is a strategic alliance between Hannon Armstrong (NYSE: HASI) and Counterpointe Sustainable Real Estate (CSRE). The partnership leverages Hannon’s efficiency and renewable energy finance capabilities with CSRE’s relationships, real estate expertise, and comprehensive knowledge of Commercial Property Assessed Clean Energy (C-PACE) programs. For more information, visit www.hasre.com.