X-Caliber and CastleGreen Loan $55M for SoCal Multi-Family Development – Business Observer
John Molinait is Pacific6 Companies has landed $55 million in funding to implement green upgrades to its planned multi-family property in Southern California, Commercial Observer has learned.
X-Grade Fundinga subsidiary of X Caliber Capital, and CastleGreen Finance provided the debt package, which includes a $34.4 million short-term first mortgage and $20.6 million long-term property-rated clean energy financing (C-PACE) through the California State Community Development Authority‘s (CSCDA) Open Program PACE. Pacific6 Enterprises will use the funding for a multi-million dollar renovation and adaptive reuse of its Luxury apartments in the center of the ocean project on 110 West Ocean Boulevard in Long Beach, California.
The case was conducted by Chris CallahanCEO of X-Caliber, and Sal Tarsiamanaging partner of CastleGreen Finance. Berkadiait is Matt Raptosh arranged the transaction.
Pacific6 Enterprises also received $94 million in funding, including a $45.5 million C-PACE loan, from X-Caliber and CastleGreen last September for its Hotel Breakers & Spa property in Long Beach. Molina bought the Ocean Center Luxury Apartments site in 2018 when it was a vacant office building. The historic 1920s property will house 80 units with amenities including a sundeck, clubhouse and fitness center.
The $20.6 million C-PACE loan will fund energy upgrades aimed at significantly reducing greenhouse gas emissions at the rate of approximately 189.08 metric tons of carbon dioxide per year. The project, slated for completion in early 2023, also includes three restaurants and a retail store.
Callahan noted that teaming up with its affiliate CastleGreen provides an ideal combination for a “one-stop financing” deal that also has a positive environmental impact.
“C-PACE loans are really designed for this type of project,” Callahan said. “This is a historic property eligible for California’s C-PACE program.”
CSCDA’s Open PACE program facilitates financing for property owners seeking infrastructure improvements for energy efficiency, renewable energy and water conservation. The platform allows borrowers to repay funds over time through a voluntary tax assessment that provides a long-term, low-cost financing option as well as the ability to transfer the repayment to the next owner.
“C-PACE is a great way for us to demonstrate our commitment to sustainability,” Molina, founding partner of Pacific6, said in a statement. “We look forward to reopening the historic Ocean Center, bringing the 1920s to the 2020s in a big way.”
The Ocean Center Luxury Apartments project will save 466,256 kilowatts of electricity per year and reduce water consumption by 4.9 million gallons per year. Savings are estimated at $65,079 in the first year and $1.9 million over 30 years, according to X-Caliber.
Callahan foresees continued growth with C-PACE-backed debt deals in California and other parts of the country beginning to push the program forward, including New York and Chicago.
“I really see it growing rapidly,” Callahan said. “We are only scratching the surface.”
Andrew Coen can be reached at [email protected].