Historic Long Beach Hotel Nabs $122M Refi
By Nick Trombola February 27, 2024 4:15 pm
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A historic hotel in Long Beach, Calif., has secured a major refinancing package as part of its renovation and reopening efforts.
X-Caliber Funding and its affiliate, CastleGreen Finance, on Monday announced that it provided $122.2 million in capital for the Fairmont Breakers Long Beach, at 210 East Ocean Boulevard. About $64.5 million of that total comes from bridge loans, clinched via a first mortgage and historic tax credits, while the rest comes from Commercial Property Assessed Clean Energy (C-PACE) financing via the California Statewide Communities Development Authority’s (CSCDA) Open PACE Program.
C-PACE financing is long term and low cost for renewable energy and energy-efficient projects, specifically aimed at historic renovations or adaptive reuse developments. That tracks closely with the designs for Fairmont Breakers, which will reduce an estimated 6 million-plus gallons of water per year.
“Partnering historic tax credits and C-PACE financing is a double win – it breathes new life into aging structures while promoting energy savings and environmental responsibility,” CastleGreen Managing Partner Sal Tarsia said in a statement. “The structure is a smart choice for borrowers looking for effective financing for renovations that reduce energy consumption and increase property value, while also preserving history.”
Opened in 1926, the Breakers Hotel, as it was known at the time, was viewed as a luxury destination for celebrities and socialites. Yet the hotel’s popularity waned as the decades wore on, with frequently changing ownerships. In the mid-1960s it was partially adapted into a retirement community, converted back into a hotel in the early 1980s, closed in 1988 and then converted back into senior housing from 1990 through 2017.
Long Beach-based investment and development partnership Pacific6 purchased the property that same year for about $40 million, according to property records, with the intention of returning it to its former hotel and spa glory. In 2022, Pacific6 announced that luxury hotel brand Fairmont Hotels and Resorts would handle day-to-day management, hence the new name.
Once reopened this spring, the 15-story hotel, designated a historic landmark in 1989, will feature 185 guest rooms, a ground-floor spa, a rooftop pool and several restaurants, including a renovated Sky Room, a popular penthouse restaurant that opened in the late 1930s while the hotel was under the Hilton brand.
The refinancing package for Fairmont Breakers is not the first time X-Caliber and CastleGreen have worked together with Pacific6 on a project in Southern California. The firms provided Pacific6 $55 million in financing, also via a combination of first-mortgage and C-PACE loans, to fund the renovation and adaptive reuse of the Ocean Center Luxury Apartments, which opened late last year just down the street from the Fairmont Breakers site.
Nick Trombola can be reached at NTrombola@commercialobserver.com.
