What's Happening?
Peachtree Group has finalized a $176.5 million Commercial Property Assessed Clean Energy (CPACE) loan for the renovation of the Rio Hotel & Casino in Las Vegas. This transaction is one of the largest CPACE financings in the U.S. and marks the largest credit deal in Peachtree's history. The Rio Hotel, part of the Destinations by Hyatt brand, underwent extensive renovations in 2024, including upgrades to guest suites, casino floor, dining venues, and infrastructure improvements. The CPACE loan retroactively finances these renovations, providing financial benefits by reducing senior loan obligations and enabling full reimbursement for completed project costs.
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Why It's Important?
The completion of this CPACE loan highlights the growing adoption of clean energy financing in the U.S. hospitality sector. By retroactively funding renovations, Peachtree Group offers a financial advantage to property owners, encouraging sustainable upgrades and energy-efficient improvements. This transaction underscores the potential for CPACE financing to support large-scale projects, contributing to the $10 billion CPACE market in the U.S. Peachtree's involvement in this market, with over $1.5 billion in originations, positions the firm as a leader in providing innovative capital solutions.
What's Next?
The successful financing of the Rio Hotel renovation sets a precedent for future CPACE transactions in the hospitality industry. As more institutional owners and lenders recognize the benefits of this financing method, the CPACE market is expected to continue its growth trajectory. Peachtree Group will likely explore additional opportunities to leverage CPACE financing for other projects, expanding its credit platform to include bridge, mezzanine, and construction lending. The firm's strategic focus on clean energy financing aligns with broader industry trends towards sustainability and energy efficiency.
