Nuveen Green Capital, a specialist in sustainable commercial real estate financing solutions, has closed on the financing of $190 million in C-PACE capital for the Virgin Hotels Las Vegas. The project marks the first C-PACE-financed deal in Clark County, as well as the largest in Nevada, and second largest C-PACE-financed deal in the country to date.
Virgin Hotels Las Vegas, a Curio Collection by Hilton property, is a resort and casino in Paradise, Nev., one mile east of the Las Vegas Strip and five minutes from the airport. The 29-acre property has 1,503 rooms and suites, more than 130,000 square feet of indoor and outdoor meeting and convention spaces, a day spa, outdoor pools, 24-hour gaming, 12 restaurants and bars plus music venue The Theater.
C-PACE, or Commercial Property Assessed Clean Energy, provides flexible financing solutions for new, ongoing or recently completed commercial real estate projects. Available in 40 states and Washington D.C., C-PACE has grown in popularity in the commercial real estate market as an attractive financing mechanism, particularly in a capital constrained market.
C-PACE financing was used to recapitalize recently completed improvements to the hotel, including HVAC upgrades, LED lighting upgrades, window replacements, water-saving plumbing upgrades, building control system, pool and spa improvements and desert landscaping. The borrower was motivated to use C-PACE to refinance existing senior and mezzanine loans, in order to de-lever the property.
"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,” Cory Jubran, senior director, originations, Nuveen Green Capital said in a statement. “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."
This notable deal is part of a larger trend in C-PACE financing that is impacting the West Coast, as well as the commercial real estate industry overall as an increasing number of owners and developers are turning to it as a cost efficient and flexible financing tool. As C-PACE continues its growth trajectory as an alternate form of debt in a capital constrained market, through the leadership of Jubran and Aidan McLaughlin, director, originations, NGC has closed a cumulative $440 million in C-PACE financing for projects across the west coast over the past 12 months.