Monday, August 26, 2024 Nuveen Green Capital (NGC) has announced the completion of an impressive $190 million C-PACE (Commercial Property Assessed Clean Energy) financing deal for Virgin Hotels Las Vegas. This pioneering project is the first of its kind in Clark County, setting a record as the largest C-PACE initiative in Nevada and securing its place as the second largest in the nation. C-PACE financing provides essential support for commercial properties to undertake energy efficiency and renewable energy improvements.
This innovative funding mechanism offers long-term, fixed-rate financing through property tax assessments, enabling significant sustainability upgrades that might otherwise be prohibitive due to cost constraints. Cory Jubran, Senior Director, Originations, Nuveen Green Capital said, “We could not be prouder to have partnered with HRHH PropCo, LLC to recapitalize the impressive Virgin Hotel Las Vegas – the largest C-PACE transaction in Nevada, and the second largest-ever C-PACE financed deal in the country. As the C-PACE industry continues to scale exponentially, both in how often it is being utilized, as well as in deal size, this underscores how impactful and cost-efficient it can be to finance projects pre-, mid-, or post-construction.
” “This was an important part of our go-forward strategy, said Cliff Atkinson, President of Virgin Hotels Las Vegas. “C-PACE decreased our cost of capital, which will provide tremendous value to all stakeholders, and the Nuveen Green Capital team was a pleasure to work with.” The investment in Virgin Hotels Las Vegas paves the way for substantial environmental improvements, aligning with the hotel’s commitment to reducing its carbon footprint while still providing a top-tier guest experience.
This venture not only represents a monumental stride for Clark County in fostering sustainable building practices but also signals Nevada’s broader dedication to promoting environmental sustainability in commercial development. “This transaction exemplifies how financial strategies can be effectively aligned with ecological goals to drive sustainable development forward,” stated a representative from Nuveen Green Capital. As the world increasingly focuses on combating climate change, the integration of sustainable practices into mainstream commercial activities becomes crucial.
This deal by NGC serves as a vital model for the hospitality sector, showcasing that economic and environmental objectives can be synergistically achieved. With this deal, Virgin Hotels Las Vegas is poised to become a leading example of sustainability in the industry, proving that eco-friendly initiatives can indeed coincide with commercial success. Virgin Hotels Las Vegas, nestled in Paradise, Nevada and part of the Curio Collection by Hilton, lies just a mile east of the bustling Las Vegas Strip and a mere five minutes from the airport.
This expansive 29-acre resort and casino features 1,503 guest rooms and suites, more than 130,000 square feet of versatile indoor and outdoor event spaces, a relaxing day spa, multiple outdoor pools, round-the-clock gaming, a dozen dining and nightlife venues, and the popular music venue, The Theater. C-PACE, or Commercial Property Assessed Clean Energy, offers flexible financing for new or existing commercial real estate projects and is currently available in 40 states plus Washington D.C.
As a favored financial tool in the commercial sector, especially in capital-limited markets, C-PACE has seen a rise in utilization. The financing was strategically employed to refinance crucial enhancements at the hotel, including HVAC and LED lighting upgrades, window replacements, water-efficient plumbing, a building control system revamp, as well as updates to the pool, spa, and desert-friendly landscaping. The decision to use C-PACE financing allowed the borrower to refinance previous senior and mezzanine loans, reducing the property’s debt leverage.
This transaction is indicative of a broader trend where more West Coast real estate owners and developers are adopting C-PACE for its cost-efficiency and flexibility. Under the guidance of Cory Jubran, Senior Director of Originations, and Aidan McLaughlin, Director of Originations at NGC, the past year has seen the firm close $440 million in C-PACE financing for various projects along the West Coast. In a notable achievement, Nuveen Green Capital has finalized $190 million in C-PACE financing for Virgin Hotels Las Vegas, reinforcing its position as a pivotal player in the market.
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