Cincinnati-area Hyatt House with medical rehab annex receives $17.7 million C-PACE loan to restart construction

Minneapolis, Minnesota (June 20, 2024) – PACE Loan Group closed a $17.7 million PACE loan for the completion of a 136-key Hyatt House-branded hotel and attached medical rehab annex in West Chester, OH, located 22 miles north of Cincinnati and within a mile of four major hospital systems (Christ Hospital Medical Center, Cincinnati Children’s Hospital, University of Cincinnati Hospital system and West Chester Hospital Surgical Center.)

The PACE proceeds will be used to refinance existing debt and complete construction of the property, which also secured $9 million in financing from Eclipse Bank. With the total capital stack of $38.2 million, the Covid-stalled project is on track to open by early Q4 of 2024.

The new construction project is unique in that it will have the traditional Hyatt-House-branded rooms, but through a Hyatt-approved special branding/design will also have 23 initial Wellness Rooms. These rooms are intended to be utilized by guests in conjunction with the onsite rehabilitation clinic, VitaLuxe. By 2026, the sponsor plans to have 40 rooms used as Wellness Rooms.

Because Ohio’s C-PACE authority only authorizes C-PACE financing in a special improvement district (SID), the City of Westchester created a SID specifically for this project to ensure completion. The project had been incomplete since 2021 and was in an important redevelopment location for the township.

“Hyatt House will be a great addition to the ongoing development at the Liberty Way interchange. West Chester is always happy to work with a business partner to provide high-quality amenities to our residents and visitors. It has taken longer than expected to get to this point; now that C-PACE financing is secured, West Chester is confident this project will be swiftly completed,” said Lisa D Brown, assistant township administrator, West Chester Township.

The PACE proceeds will be used to finance energy conservation and renewable energy measures. Qualifying projects include HVAC, plumbing, lighting, electrical, building envelope, and elevators. The renewable and energy conservation measures are expected to save $31,620 annually.

“This was a creative, but very impactful way to deploy C-PACE and will enable the project team to finalize and open a cutting-edge concept that blends hospitality and healthcare,” said Rafi Golberstein, CEO and founder, PACE Loan Group. Parag Vipani, vice president-originations, arranged the financing package with PLG’s internal underwriting team and Jacob Roth, vice president-underwriting.

The hotel will feature standard single king guest rooms, standard double queen guest rooms, single king and double queen suites, an 8,000 sq. ft. conference and wellness center, a 2,000 sq. ft. indoor pool area, a meeting room, full kitchen and restaurant, outdoor pavilion, and 10,800 sq. ft. wellness/medical annex. The wellness annex is expected to be leased to a provider that offers physical and occupational therapy, pharmacy services, spa, medical and wellness workshops, a conference center, and retail services. The clinic will operate independently from the hotel in its leased space and will provide coordinated packages allowing guests/patients to stay at the hotel while attending the clinic.