Michigan Medical Office Building receives $2.6 million in C-PACE to retroactively finance conversion renovation

Minneapolis, Minnesota (Sept. 17, 2024) – PACE Loan Group provided a $2.6M C-PACE loan for Howell Health Hub, an 86,300 sq. ft., two-story modern medical office building in Howell, Michigan. The C-PACE proceeds supplemented the project’s total capital stack of $10.26 million, which includes $4.16 million in equity and a $3.5 million line of credit for tenant improvements. The developer, Acquira Realty Holdings, began the complete renovation of the 1956-built office property in May 2022.

The improvements include a new lobby entrance atrium, new windows, an upgraded cooling system, and a modern secondary lobby. It also includes a 4,000 sq. ft. spec suite to help prospective tenants visualize potential unit layouts. While the renovation was completed in July of 2024, further suite improvements are planned as the property continues to be leased.

The C-PACE proceeds retroactively cover energy efficiency measures tied to the complete renovation of the former office building, including roof insulation, wall insulation, ENERGY STAR windows, HVAC, plumbing, and LED lighting. The covered improvements are expected to save $304K annually over their useful life of 30.4 years.

“This was a good use of C-PACE since the former office building has a prime location in the area, where healthcare services are one of the largest employment sectors and projected to see growth through 2045,” said Parag Vipani, vice president-Originations, PACE Loan Group.

The City of Howell PACE program is managed by Lean & Green Michigan, through a public/private partnership. Howell Health Hub is the first PACE project for the City of Howell, and the eighty-third in Michigan.  With their twenty-first project, PACE Loan Group has now provided financing for more PACE projects in Michigan than any other lender