Peachtree Group Closes $46M C-PACE Loan for Palm Springs Hyatt Hotel
Peachtree Group has closed a $46 million Commercial Property Assessed Clean Energy (C-PACE) loan for the Thompson Palm Springs, a 168-key Hyatt-branded lifestyle hotel located at 414 North Palm Canyon Drive in downtown Palm Springs, California. The transaction, led by Jared Schlosser, Head of Credit Originations and Commercial PACE at Peachtree Group, marks the firm's largest C-PACE deal to date.
The borrower is Hall Group, a Dallas-based investor and developer. Proceeds from the C-PACE assessment are earmarked for lighting and plumbing upgrades, electrical and wiring improvements, and seismic resiliency enhancements designed to safeguard the property against potential earthquakes.
Deal Structure and Capital Stack
The $46 million C-PACE assessment represents 34.5% of the hotel's stabilized appraised value and approximately 29% of total development costs. Structured as a voluntary special assessment on the property's tax bill rather than a conventional mortgage obligation, C-PACE financing is repaid over a long-term horizon — typically 20 to 30 years for commercial hospitality assets — providing sponsors with fixed-rate capital that sits outside the traditional debt stack.
The Thompson Palm Springs financing is characterized as a refinance of C-PACE on the project, applied at or near the hotel's completion. The property was slated to open in May following the closing of the financing. This approach — using C-PACE as a recapitalization tool after construction is substantially complete — has become increasingly common as sponsors seek to optimize their weighted average cost of capital in a higher-rate lending environment.
Property Overview
The Thompson Palm Springs is a 168-key lifestyle hotel operating under the Hyatt brand in downtown Palm Springs, situated along North Palm Canyon Drive in the Coachella Valley leisure market. The property is owned by Hall Group and carries the Thompson Hotels flag, a Hyatt-affiliated upscale lifestyle brand.
C-PACE Market Context
The $46 million assessment sits above the current average C-PACE transaction size, which has grown from roughly $800,000 in 2017 to approximately $40 million by 2026, reflecting the program's rapid adoption among institutional commercial real estate sponsors. Marquee hospitality C-PACE deals have reached $175 million or more in recent years, underscoring the scale now achievable through the financing mechanism.
Hotel sponsors have increasingly turned to C-PACE as a means of accessing fixed-rate, long-term capital at rates that can compare favorably to debt fund and bank construction financing, which has priced in the 8% to 10%-plus range on an all-in basis in recent years. C-PACE rates for hospitality assets have generally fallen in the high-6% to mid-7% range, depending on the state program and market conditions.
California's C-PACE program enables the financing of qualifying energy-efficiency, water conservation, and resiliency improvements — including seismic upgrades — through a property tax assessment, with the obligation transferring with the property upon sale.
Peachtree Group's C-PACE Platform
Peachtree Group, headquartered in Atlanta with offices in Austin, Texas, operates an active credit and lending platform that includes C-PACE origination alongside conventional commercial real estate debt. Jared Schlosser leads the firm's C-PACE origination efforts as Head of Credit Originations and Commercial PACE. The Thompson Palm Springs transaction represents the firm's largest C-PACE financing to date.
Sources
Peachtree Group — Peachtree Group Closes $46M C-PACE Loan for Palm Springs Hyatt Hotel