PACE Equity Funds Largest New PACE Construction Project in Ohio
Jan 30, 2019, 20:56 ET
MILWAUKEE, Jan. 30, 2019 /PRNewswire/ -- PACE Equity recently completed funding for the largest new PACE construction project in Ohio, a highly sustainable new Homewood Suites and Hilton Garden Inn to be constructed in Easton. The project reflects the developer's commitment to the environment while meeting demands of the new generation of green travelers. The 175,000-square-foot, 240-key hotel takes advantage of the latest innovations in sustainable design and building technology making a significant difference in both its environmental impact and cost of operation.
PACE Equity funded 22 percent of the capital stack, approximately $10.4 million out of a $47.5 million dollar capitalization. The construction lender provided another $26.25 million, and developer Middletown Hotel Management Company, Inc. contributed the remainder. By using PACE Equity funding, the project's investor return rate (IRR) improved by 35 percent and the multiple of invested capital increased 47 percent. PACE Equity also added value by providing a turnkey solution handling all governmental PACE requirements, district engagement, and program approval management and providing a utility impact and engineering analysis.
For more information on PACE Equity, visit www.pace-equity.com.
"There is a direct correlation between environmental benefits and economic benefits. Sustainability today is a best building practice," said Har Bhatnagar, President and CEO of Middletown Hotel Management Company, Inc. "Integrating green building strategies into the design and construction of the Homewood Suites and Hilton Garden Inn makes good business sense and PACE Equity is helping us meet our clean energy goals."
The environmentally responsible aim of the new build was a natural fit to utilize PACE Equity funding, which provides low-cost private capital to building projects including projects with sustainable energy goals.
From a sustainability perspective, the Homewood Suites and Hilton Garden Inn is a remarkable project. Its design incorporates a highly optimized HVAC system that includes energy recovery make-up air technology and a geothermal system. It features a high-performance building envelope, has complete interior and exterior LED lighting, and uses low-flow plumbing fixtures throughout.
Utility impact modeling of the Homewood Suites and Hilton Garden Inn design against the International Energy Conservation Code 2012 shows the building will perform 32 percent better on an energy consumptive basis than required by the stringent IECC code — saving nearly 5 million BTUs per year. With a projected utility cost of $1.61 per square foot, the building is expected to save 52 cents per square foot annually. That is a 32 percent energy cost savings.
The new Homewood Suites and Hilton Garden Inn will fulfill the need for a high-quality hotel space in the trendy Easton Town Center to further accommodate the 26 million visitors the district receives each year. Offering extended stays as a home away from home, and shorter visits in an open, inviting atmosphere.
"Middletown Hotel Management Company is a very well organized and sophisticated developer," said David Oliverio, the Greater Cincinnati Area Market Leader for PACE Equity. "We thoroughly enjoyed working with their highly professional team bringing this new, eco-friendly hotel development to Easton Town Center."
About PACE Equity
PACE Equity is the leading Property Assessed Clean Energy (PACE) funder of commercial real estate development projects in the U.S. PACE Equity is a resourceful addition to the capital stack to boost return on investment while making commercial buildings more sustainable through clean energy efficiencies. PACE Equity has unmatched expertise in new commercial construction, having completed the first new construction projects in several asset classes and completed the first PACE funded projects to utilize Historic and New Markets Tax Credits. PACE Equity has a local presence in 20 markets and can fund projects on a national basis.
What is PACE?
PACE, which stands for Property Assessed Clean Energy, is a simple and effective way to finance energy efficiency, renewable energy, and water conservation upgrades to commercial buildings. PACE can pay for new heating and cooling systems, lighting improvements, solar panels, water pumps, insulation, and more. It can be used for almost any property – commercial, industrial, multifamily, non-profit and agricultural.
PACE facilitates building improvements that result in utility savings to be funded by private capitaland repaid via a long-term tax assessment. The program is designed to break down longstanding barriers to energy efficiency and to promote job creation through economic development.
SOURCE PACE Equity LLC