Lever Funds Revival of Historic Blackstone Hotel
Lever Energy Capital announces the closing of $4.6MM in Commercial Property Assessed Clean Energy (C-PACE) financing to revive the century-old Blackstone Hotel in the burgeoning Blackstone District of Omaha, Nebraska. Originated in partnership with PACE Sage Capital, the project marks Lever’s first commercial real estate financing in Nebraska. Two prominent Omaha-based development firms, Clarity Development Company and GreenSlate Development, realized the value of low-cost C-PACE financing in putting together a total capital stack of $70MM to redevelop the Blackstone Hotel.
“We are thrilled to partner with Clarity Development Company and GreenSlate Development to this bring this noteworthy hotel project to the city of Omaha,” noted Lever Energy Capital President, Mark Boyer. “This is a great example of how commercial real estate developers can leverage C-PACE alongside traditional debt, equity, TIF, and tax credit financing to improve project economics and transform older buildings into more accretive and efficient assets. We look forward to financing more real estate in Nebraska.”
Clarity and GreenSlate aim to maintain the Blackstone Hotel’s historical charm while converting the 110,000 square foot building and 46,000 square foot addition into a 205-room hotel featuring multiple restaurants, cocktail lounge, conference center, ballrooms, pool, and fitness center. Constructed in 1916, the Blackstone Hotel was once Omaha’s most prestigious luxury hotel. In 1984, the building was converted to an office space, most recently serving as part of the headquarters of Kiewit Corporation. In 2018, the development team purchased the building to return it to its original use as a prominent hotel. The improved Blackstone Hotel will open in the Spring of 2020.
Lever’s C-PACE funds will aid to reduce the hotel’s operating expenses by financing upgrades to building components such as lighting, heating and cooling units, windows, and building controls. These improvements are expected to generate $116,000 in annual utility savings and over $4.1MM in total utility savings over the financing’s 23-year term. The savings and revenue associated with Lever’s C-PACE financing will pay for and ultimately exceed the financing payments, increasing the property’s value by an estimated $1.5MM.
“Lever’s C-PACE program was an integral part of our capital stack because of the long-term nature and fixed cost of the financing,” said Tom McLeay, President of Clarity Development. “We routinely work with various forms of complex financing, but C-PACE is a straightforward tool for commercial real estate developers to employ.”
A relatively new financial tool for the state’s commercial real estate industry, Nebraska passed C-PACE legislation in 2015 allowing municipalities to create local C-PACE programs that provide low-cost financing to real estate owners making energy efficiency, renewable energy, and water conservation upgrades. Creating the state’s first C-PACE program, Omaha passed an ordinance in 2017 enabling C-PACE financing in the city. Commercial real estate owners in Omaha, Lincoln, and a growing number of other Nebraska municipalities can benefit from C-PACE financing.
Working with municipal C-PACE programs in Nebraska and over 21 other states, Lever is a leading provider of C-PACE financing with $500MM in capital to invest in commercial real estate across the United States. The company takes an innovative, scalable approach to providing clients and partners with a reliable source of accretive capital.
About Lever Energy Capital
Lever Energy Capital is a Denver-based Commercial Property Assessed Clean Energy (C-PACE) financier. Through the strong economics of C-PACE financing, the company strives to optimize commercial real estate assets while positively impacting profit, people, and the planet. Among the largest national C-PACE funds, Lever finances commercial real estate across all C-PACE programs in the United States. To learn more about Lever Energy Capital, visit the company’s website at https://www.leverenergycapital.com/.