Nuveen Green Capital Supplies $93M C-PACE Loan for Cleveland Office Conversion to W Hotel 

The increased utilization of Commercial Property Assessed Clean Energy (C-PACE) debt for conversion projects has reached new heights with Cleveland’s fifth-tallest building.

ErieView Development has secured a $93.4 million C-PACE loan from Nuveen Green Capital (NGC) to transform the former Erieview Tower building in Downtown Cleveland into Ohio’s first W Hotel, according to the lender. The developer will also be offering apartments and office space on the building’s upper floors as part of the large-scale redevelopment.

Chris Ellis, senior director of originations at NGC, said the deal announced Tuesday highlights how C-PACE financing can be used in the capital stack for a variety of CRE projects, especially office conversions. Ellis noted that the borrower opted to deploy the maximum amount of allowable C-PACE proceeds under Ohio law to save costs and avoid a future refinance.

“C-PACE can be particularly beneficial for adaptive reuse projects like this one, since older buildings being converted to new uses often fall short of current energy codes and have more components that need to be updated,” Ellis told Commercial Observer. “This, in turn, creates a larger pool of costs eligible for C-PACE’s accretive financing.”

Ellis said the deal marks the largest C-PACE transaction closed in Ohio to date. He added that going forward C-PACE can remain an effective financing tool for adaptive reuse projects at aging commercial buildings across the Midwest in cities like Cleveland, Columbus, Chicago, Detroit and Minneapolis. 

In addition to the C-PACE loan, ErieView Development also landed $20 million of senior financing from CNB Bank for the project. It also received $104.6 million of funding from a combination of equity sources, bridge loans against tax credits granted for maintaining historical aspects of the building, a loan from Cuyahoga County and incentives from the Cleveland-Cuyahoga County Port Authority, according to Ellis. 

Located at 100 Erieview Plaza, the 40-story, 1964-built tower will be transformed into the 210-key W Cleveland hotel. In addition to hotel rooms, the building will also have 215 apartments on floors 17 to 28 and office space on floors 29 to 38.  The hotel and apartments are slated for completion in late 2027.

“Erieview has always been part of a bigger vision for downtown, and this project brings that vision to life,” Elias Kassouf, principal at ErieView Development, said in a statement. “This is a transformational investment in the heart of the city.”

Andrew Coen can be reached at acoen@commercialobserver.com.