A $55.7 million, 126-unit luxury mixed-use development in the Koreatown section of Los Angeles planned by Live, Work, Create Equity LLC is moving forward with $44.5 million in C-PACE construction financing. Construction on 2870 Olympic is expected to begin this summer.
Located at 2870 W. Olympic Blvd., the seven-story building will also have ground-floor retail and a parking garage. Thirteen of the 126 units are to be set aside as affordable housing, according to media reports.
The combined 80 percent Loan-to-Cost non-recourse financing included $14.5 million in C-PACE energy-saving financing, according to Green Pace Financial, Inc., which along with its affiliate Hoover Financial Inc., recently closed on the deal.
Counterpointe Sustainable Real Estate, a Greenwich, Conn.-based real estate finance firm specializing in C-PACE financing, stated in a separate statement that it had closed on the $14.5 million financing through the California Statewide Communities Development Authority’s Open PACE program. CounterpointeSRE said it would support energy efficiency, seismic strengthening and water conservation measures at the property.
Shawn Heyl, CEO of San Diego-based Green Pace Financial, said his firm is a “direct broker correspondent to Counterpointe to originate and underwrite the C-PACE financing.”
Heyl said the capital stack for the development includes $11.2 million in land and cash equity with the balance of the C-PACE financing coming from a new $30 million non-recourse senior construction loan provided by one of Green Pace Financial’s most active private equity construction lenders. UC Funds, a Boston-based specialty finance firm that has provided more than $2 billion in capital solutions, confirmed it provided the $30 million loan.
“2870 Olympic represents UC Funds’ expertise in PACE lending and our ability to work through complex deals,” Dom Manago, managing director of sales for UC Funds, said in a prepared statement.
C-PACE allows commercial property owners to get low-cost, long-term financing for energy efficiency, water conservation, seismic retrofits and renewable energy projects that are then repaid as an assessment on the property tax bill for current and future owners. Currently, 37 states and Washington, D.C., have enacted authorizing legislation and the program is active in 20 states and Washington.
Helping Housing Shortage
Heyl noted that with the onset of COVID-19, the construction of residential properties has been designated by the City of Los Angeles as an essential service industry to help with the Southern California housing shortage.
“Our C-PACE financing teams are working overtime to help keep our economy moving by creating essential jobs while also helping save energy,” Heyl said.
Heyl said his company has eight multifamily projects totaling more than $500 million in its funding pipeline with the 2870 Olympic project being one of its largest closings to date. In August, Green Pace Financial closed an $18.5 million C-PACE financing for the Thompson Hotel and Tommie Hotel in Hollywood, Calif., with the Relevant Group, a hospitality developer.