The Virgin Hotels Las Vegas received $190 million in C-PACE financing to cover the cost of environmentally sustainable improvements to the property.
Lender Nuveen Green Capital said this is the largest commercial property assessed clean energy-financed deal in Nevada and the second-largest in the country, according to a news release.
C-PACE lending is capital available to new commercial builds or renovations to cover the cost of environmentally friendly elements in a building's design. Borrowers pay back this debt through property taxes as liens are placed on their properties. As more traditional sources of financing became more expensive and challenging to secure, C-PACE has grown in popularity.
The hotel's owners, a collection of companies operating under HRHH Propco, used the C-PACE financing to recapitalize recently completed improvements to the property. It refinanced existing senior and mezzanine loans to de-lever the property.
The work included the hotel's heating, venting and air-conditioning upgrades; LED lighting upgrades; window replacements; water-saving plumbing improvements; building control system; pool and spa improvements and desert landscaping.
"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," said Cory Jubran, senior director of Originations at Nuveen Green Capital, in the news release.
The 1,503-key Virgin Hotels Las Vegas, a Curio Collection by Hilton property, is located in Paradise, Nevada, a mile east of the Las Vegas Strip. The 29-acre property has more than 130,000 square feet of indoor and outdoor meeting and convention spaces as well as a day spa, outdoor pools, 24-hour gaming and 12 restaurants and bars. It also has a music venue, The Theater.
HRHH Propco, which includes Dream Unlimited Corp., Cowie Capital Partners, Fengate Asset Management, Virgin Hotels North America and Juniper Capital Partners, acquired the property in 2018 when it was the Hard Rock Hotel & Casino from a Brookfield-managed private real estate fund.
"This was an important part of our go-forward strategy," said Cliff Atkinson, president of Virgin Hotels Las Vegas, in the news release. "C-PACE decreased our cost of capital."