Petros PACE Finance Closes Largest C-PACE Deal in History with $153 Million Financing Towards $820 Million Black Desert Resort Project

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Oct 03, 2022, 09:00 ET

Ivins, Utah Based Development Led by Reef Capital Partners

Strength of Petros Balance Sheet and Immediate Access to Capital Facilitates Funding

Deal Marks Growing Acceptance of C-PACE as Financing Tool of Choice for Developers and Owners

AUSTIN, Texas, Oct. 3, 2022 /PRNewswire/ -- Petros PACE Finance (Petros), the largest C-PACE provider in the country and a leader in innovative and structured finance, today announced that it has closed on a record $153 million C-PACE financing as part of the $820 million, 580-acre world-class development, Black Desert Resort Project in Ivins, Utah. Located near Zion National Park in one of the fastest growing metropolitan areas in the country, Phase 1 of Black Desert Resort will include a luxury resort hotel, approximately 1,000 condos, 190,000 square feet of retail, restaurants, and commercial space, 25,000 square feet of event space, a full clubhouse, and a Tom Weiskopf-designed 19-hole golf course. The development is currently under construction and upon completion will be the largest hospitality offering in the state of Utah. Phase I of the project is set to open in the fall of 2024.

Commercial Property Assessed Clean Energy (C-PACE) is a recognized financing mechanism for energy efficiency, water efficiency, renewable energy and resilience projects. Through C-PACE, property owners can finance building retrofits, gut rehabilitations and new construction with no upfront costs; and in some markets eligible projects can be funded retroactively to replace more expensive financing.

The Black Desert Resort funding is the largest single transaction in C-PACE history and approximately 50% larger than the previous record deal size. Petros, the industry leader, is partnering with the project's sponsor, Reef Capital Partners, a nationally recognized, diversified, vertically integrated commercial real estate investment company that creates and manages private credit and private equity real estate transactions. This landmark deal underscores the growing acceptance of C-PACE as a mainstream financing mechanism for developers and owners seeking enhanced returns on capital and speed to close while investing in critically important sustainability initiatives.

Mansoor Ghori, CEO and co-founder of Petros PACE Finance stated, "C-PACE has arrived as a mainstream financing tool of choice for large, complex integrated commercial construction and renovation projects across the country. The Black Desert Resort funding is a perfect example of the value C-PACE financing brings to property owners: lower financing costs, more flexibility across the capital stack and the ability to fund environmentally important improvements and innovations. This deal – the largest the industry has seen to date by a factor of 150%, underscores our key competitive differentiators: a strong and flexible balance sheet, certainty of close, experienced and seasoned underwriting and ability to deliver innovative solutions for some of the most complex and esoteric real estate projects. We are grateful for the support of Reef Capital Partners, who understand the utility of our value proposition and worked collaboratively to get this transaction closed."

Patrick Manning, Managing Director of Reef Capital, added, "Reef Capital Partners is delighted to be working with the wonderful City of Ivins to build a world class resort in the most beautiful location in the State of Utah. We believe Black Desert Resort will be the most environmentally friendly resort ever built, with Reef spending more than $200 million dollars on project components that are more environmentally friendly than the law requires. Being great stewards of this remarkable land is at the center of every decision we make on this project. Petros has been the perfect financing partner for this development, and it's easy to see why they are the largest and most successful PACE finance company in the world. They have the experience, flexibility, expertise, and balance sheet to make a project of this size a reality and have been an absolute pleasure to work with through this process. "

The $153 million capital is being used by Reef to fund numerous eligible energy-efficient and resiliency solutions, including exterior and interior measures such as LED lighting, HVAC, and thorough seismic strengthening throughout The Black Desert Resort. Additionally, the funds will be used to deploy the largest ever use of cost-effective, innovative low-voltage wiring throughout the development.

Jim Stanislaus, Chief Financial Officer and co-Founder of Petros, said, "In this volatile interest rate environment, developers and property owners are looking for a C-PACE financing partner that can reduce costs, move quickly and work flexibly across the capital stack and provide comfort that the transaction will close. With billions in committed capital from a number of blue-chip sources, Petros is uniquely positioned to deliver a set of structured financing solutions that unlock the power of a property owner's balance sheet, freeing up critical cash flow to invest in state-of-the-art sustainable construction and design."

"We are grateful for the support and partnership of Reef Capital, which immediately understood the power of our financing program and its contribution to the success of the overall project. Our partnership with Black Desert Resort, a world-class resort under construction in one of the fastest growing and economically exciting parts of the country, is a great example of how C-PACE financing can be leveraged to create value up and down the balance sheet. The size of this deal is a clear signal that Petros' C-PACE financing is a viable tool for the largest and most progressive developers and owners," said Andy Meyer, Managing Director of Originations at Petros.

Petros PACE Finance

Petros PACE Finance, LLC is the national leader in the C-PACE marketplace, dedicated solely to providing long-term C-PACE financing to commercial property owners seeking to lower energy costs, reduce their carbon footprint and increase property values and meet environmental, social and governance (ESG) goals. Its leadership team has decades of executive-level experience in private credit and structured finance, with direct long-term institutional investor relationships. With billions in committed capital, Petros is able to close transactions in eligible C-PACE markets nationwide. To learn more about Petros PACE Finance visit our website at www.petros-pace.com.

Reef Capital Partners

Reef Capital Partners and its subsidiaries specialize in creating and managing value-add private equity real estate transactions as well as opportunistic private credit transactions secured by commercial real estate. Our corporate synergies and experience enable us to find, structure, and manage attractive investment opportunities throughout the capital stack for a given real estate opportunity. Since 2005, Reef's team of experts have partnered with and managed assets on behalf of over 700 institutional and individual partners worldwide.

Black Desert Resort

Reef Capital Partners is developing Black Desert Resort. Upon buildout, the property will offer 150 hotel rooms; 1,050 residences; miles of nearby trails; a wellness spa; and 46,160 square feet of retail and restaurant space. The property will also feature 32 single-family estate lots and approximately 214,000 square feet of commercial space, with the amenities of the resort center available for full-time residents.

SOURCE Petros PACE Finance, LLC