PACE Equity completed funding for a new AC Hotel by Marriott to be located in downtown Little Rock, Arkansas, expected to be complete in the summer of 2019. The 114-key boutique hotel will occupy the vacant Hall-Davidson buildings, built in 1923, accompanied by a 5,000-square-foot restaurant and lounge. The project is helping revitalize downtown Little Rock, bringing a high-end hotel to the area while preserving the buildings’ historic architectural features. PACE Equity funding is enabling the developer, Rock Capital Real Estate, to incorporate state-of-the-art sustainable technology into the building to achieve significant energy savings while increasing the investor return rate.
By using PACE Equity funding, the developers did not have to bring in another equity partner and will gain a substantial projected investor return rate (IRR) boost with a drop in the project’s overall weighted average cost of capital (WACC). PACE Equity also added value as a turnkey solution by providing an energy engineering study for the re-development, and handling all governmental PACE requirements, district engagement and program approval management.
“It was excellent to work with PACE Equity who kept their process simple within a complex deal,” said Kunal Mody, Project Co-Developer.
The improvements made during renovation were a natural fit to utilize PACE Equity funding, which provides low-cost private capital to building projects including projects with sustainable energy goals.
Since the new AC Hotel is modeled against existing building conditions, it is a great example of sustainability with 70 percent energy savings compared to previous building conditions with nearly everything being replaced with state of the art, highly optimized technology making the Marriott very well engineered for energy savings.
“It’s a great example of using PACE Equity to contribute to the revitalization of a downtown like Little Rock. The residents have been wanting to see it happen for years and it’s finally gaining some momentum,” said Beau Engman, Founder & President of PACE Equity. “Rock Capital has been a great group of people, very organized and passionate about Little Rock. It’s the type of group you enjoy working with because you can tell how much they care about bringing new life into their community.”
To learn how much PACE Equity funded, as well as the benefits for the developer, read our case study.
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 capital and 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.