Peachtree Group has closed on $11 million of Commercial Property Assessed Clean Energy financing for the redevelopment of the MCM Elegante Hotel in Beaumont, Texas.
With financing made available through Lone Star PACE, the project will convert the existing property into a 287-key, dual-branded Marriott International hotel, operating as both a Courtyard and Element. The Courtyard will feature 135 rooms, while the Element will include 152 rooms for extended-stay guests. The MCM Elegante will remain open during the renovation, which is expected to take approximately 18 months to complete.
The sponsor is utilizing C-PACE financing to fund a comprehensive package of energy and water efficiency upgrades. These include high-efficiency building envelope improvements, new windows, enhanced HVAC systems, upgraded lighting and improvements to domestic hot water systems and low-flow plumbing.
“C-PACE plays a critical role in helping owners close the gap on projects that otherwise would not pencil in today’s environment,” Robert Loeb, assistant VP of originations at Atlanta, Ga.-based Peachtree Group, said in a statement. “We’re seeing more situations where strong assets are held back by capital constraints, not fundamentals. By offering a lower overall cost of capital option, C-PACE allows sponsors to move forward with renovations that might otherwise be delayed or shelved.”
“C-PACE continues to play a critical role in repositioning and revitalizing hospitality assets across Texas,” added Lee McCormick, president of Lone Star PACE.
The upgrades to the project are expected to deliver substantial operational benefits, including a 29 percent reduction in annual energy consumption; a 39 percent decrease in water usage; and a 30 percent reduction in natural gas use.