A to-be-built seniors housing community in Houston, Texas just received non-recourse PACE (Property Assessed Clean Energy, not the Program of All-Inclusive Care for the Elderly) financing, courtesy of HJ Sims. Consisting of 74 assisted living units, 22 memory care units and 12 independent living cottages, the community is being developed by StoneCreek Real Estate Partners and Civitas Senior Living, the latter of which will operate it upon opening in Summer 2022. The project is a redevelopment of the Copperfield Racquet and Health Club and is set on 6.6 acres.
The PACE program finances 100% of the energy efficiency, renewable energy, water conservation, resilience improvements and the related costs for ground-up new construction and renovations/retrofits up to 20% of the property’s appraised value. The financing is collected with regular local real estate taxes and assessment payments are amortized at a fixed rate throughout the useful life of the project.
So, Sims obtained approval for PACE from the senior construction lender, accessing $2.8 million in financing at an interest rate of 5.85% to lower their total cost of capital. That is much cheaper than the mezzanine debt that would often round out the capital stack. There is also a $19.6 million construction loan from a traditional lending partner funding the project.
