PACE Loan Group brings $3.5 million C-PACE financing to LaSalle Plaza capital stack
Complicated financing package uses C-PACE as its last piece of the puzzle
Minneapolis, Minnesota (Nov. 14, 2023) – Hempel Real Estate acquired LaSalle Plaza, a 30-story office building in downtown Minneapolis, from the prior owner’s lender in June, and finalized the financing package with a $3.5 million C-PACE loan arranged by PACE Loan Group. The rest of the financing package included $21 million from Premier Bank of Maplewood, and $25 million from Edina's Tradition Capital Bank.
The C-PACE (Commercial Property Assessed Clean Energy) program finances building improvements that promote energy efficient, renewable, and building resiliency measures. At LaSalle Plaza, the C-PACE will be utilized for upgrades to the property, including HVAC and elevators, as it repositions the building.
“This transaction is a great example of how to use C-PACE to creatively complete your capital stack. The LaSalle acquisition was a major trade and incredibly complicated to finance, and we are very proud to be part of this project and its revitalization.” said Rafi Golberstein, CEO – PACE Loan Group.
Hempel Real Estate, the Eden Prairie-based real estate firm acquired LaSalle Plaza from Northwestern Mutual, which had taken possession of the property as the lender from its prior owner. Built in 1991, LaSalle Plaza is a Class A office tower spanning over 620,000 square feet, with 60,000 square feet of retail space and a current occupancy rate of 68.9%. Hempel paid $46 million, or $74 per square foot for the asset; more recently Hempel purchased the connected parking ramp and adjoining property, the Pence Building, a historic, 89,656-square-foot office building that went up for auction this summer.
“We’ve been longtime believers in PACE as an accretive part of our cap stack, and that is especially true in our acquisition of LaSalle Plaza. The property is a gem of the Minneapolis skyline and probably one of the hardest deals to finance throughout my entire career”, said Josh Krsnak, CEO of Hempel Real Estate. “We could not have done this without PACE Loan Group.”
Hempel Real Estate acquires, develops, and redevelops commercial real estate throughout the Midwest, focusing on turnaround projects that add value for tenants, neighborhoods, and cities. The Hempel portfolio features a diverse collection of properties in the Minneapolis-St. Paul and Milwaukee markets. Located in both downtown and prime suburban areas, our properties include assets in the retail, office, and multifamily markets.
About PACE Loan Group
PACE Loan Group (PLG) is a national leader in the C-PACE marketplace, providing direct C-PACE financing to commercial property owners. PLG benefits from institutional support with capital from funds managed by AB CarVal, a subsidiary of Alliance Bernstein. The PLG team provides expertise up and down the capital stack, from origination and underwriting to loan servicing. To learn more about PLG, visit www.paceloangroup.com.