WASHINGTON, D.C. — Nuveen Green Capital (NGC) has provided $465 million in C-PACE financing for The Geneva, an office-to-residential conversion project in Washington, D.C. The transaction represents the largest Commercial Property Assessed Clean Energy (C-PACE) financing in history as well as D.C.’s largest office-to-residential conversion to date, according to NGC.
The borrower, Philadelphia-based developer Post Brothers, also received a $110 million senior loan from investment firm Mavik, bringing total financing to $575 million. The project’s overall price tag is $750 million, according to The Wall Street Journal.
Located at 1825-1875 Connecticut Ave. NW, the 604,000-square-foot office property is comprised of two nine-story towers at the confluence of D.C.’s upscale Kalorama, Dupont Circle and Adams Morgan neighborhoods.
The property will be converted into a 15-story luxury apartment building with 429 market-rate units, 42 extended-stay rentals, 61 affordable housing units and 57,000 square feet of commercial space. A timeline for construction was not provided.
The $465 million in C-PACE financing was administered through DC Green Bank, which serves as the administrator of the DC PACE program on behalf of the District of Columbia. The DC PACE program is a special financing option for renewable energy projects such as solar, energy efficiency upgrades like new windows or HVAC units, conservation projects like green roofs and water use systems.
JLL advised Post Brothers on the C-PACE financing. Combined with an office-to-residential tax abatement and Mavik’s investment, the C-PACE capital provides Post Brothers with significant cost advantages over conventional financing structures, according to NGC. C-PACE proceeds will be utilized to fund key energy and water efficiency measures, including the property’s HVAC, lighting, hot water and building envelope improvements.
The C-PACE-financed measures are estimated to avoid approximately 1,514 metric tons of carbon emissions annually, equivalent to the carbon emitted by approximately 500 cars. The operational carbon intensity will also be 47 percent lower than before the conversion.
NGC says that the transaction reflects C-PACE’s dramatic market expansion and institutional adoption, with nearly $30 million lent through the DC PACE program in the previous fiscal year. Since 2020, NGC’s assets under management have grown fivefold to more than $4 billion.
NGC is an affiliate of Nuveen, the $1 trillion-plus asset manager and wholly owned subsidiary of TIAA.
— Kristin Harlow