Austin has a way of reinventing itself. Along South Lamar, one of the city's most recognizable corridors, The Code is bringing a new kind of hospitality experience to the neighborhood. The project also offers a useful example of refinancing with TX-PACE financing. The newly constructed property includes 154 boutique hotel rooms and 28 long-term rental units. It also offers approximately 1,000 square feet of meeting space and amenities including a resort-style pool, rooftop terrace, outdoor kitchen, lobby lounge and concierge services.

But there is another story behind The Code, one that shows how TX-PACE financing can work within a newly constructed property's capital structure. Rather than financing future improvements, the owner is using TX-PACE refinancing for debt already incurred on eligible energy and water improvements built into the project.

That distinction makes The Code an interesting addition to the growing number of ways owners are using TX-PACE.

Refinancing Completed Improvements with TX-PACE Financing

The Code's TX-PACE assessment is approximately $54.24 million. Nuveen Green Capital serves as the PACE lender, and the financing has a 30-year term. The owner is using TX-PACE financing to refinance debt tied to eligible improvements already included in the development.

For owners and developers, that creates another opportunity to consider TX-PACE after they incur eligible project costs—not just during initial planning and construction. In a large development, construction costs, financing and permanent capital do not always line up neatly. TX-PACE can provide another option when owners refinance eligible improvement costs.

For The Code, that opportunity came after the improvements were already incorporated into the property.

The Numbers Behind The Code

The financial performance of those improvements is equally important.  The Code's Savings-to-Investment Ratio (SIR) is 4.71, compared with the minimum required SIR of 1.0.  In other words, the project's calculated savings are more than four times the minimum required to qualify.

The analysis projects approximately $10.78 million in total savings over the SIR analysis period. The SIR investment basis is approximately $2.29 million. The project is also expected to reduce utility use meaningfully. First-year projections show approximately 16.4% electricity savings and 39.4% water savings compared with the baseline.

Those results come from a range of improvements throughout the property, including building-envelope upgrades, interior and exterior LED lighting, HVAC improvements, domestic hot-water equipment, low-flow water fixtures and elevator upgrades.

For a property expected to operate for decades, those are more than construction decisions. They are investments in how the building will perform over time.

Why Long-Term TX-PACE Financing Matters

That long-term perspective is one of the things that makes TX-PACE particularly relevant to a project like The Code. The financing has a 30-year term. That gives the owner a financing horizon that extends well beyond the property's opening.

It also creates a closer connection between the building investment, the savings those improvements are expected to generate and the financing that supports them. For commercial property owners, today's investment decisions can shape how the property performs years from now.

"Working with the Nuveen Green Capital team, as well as Texas PACE Authority, to recapitalize The Code through C-PACE was a positive experience. The team's in-depth knowledge of and expertise in C-PACE enabled us to ensure a seamless closing. By leveraging C-PACE's attractive and flexible terms, we were able to cost-effectively finance previously installed energy and water efficiency measures while preserving equity and optimizing our capital stack. We look forward to many future financings in Texas!" — Jon Koeppe, Director of Investments, Pearlstone Partners

A Different Chapter in the TX-PACE Financing Story

The Code is also a good example of how TX-PACE continues to evolve. As we explored in our recent article, From Nice to Have to Need to Have: The Evolution of TX-PACE, owners increasingly consider TX-PACE within the property's larger financial picture. The program has grown beyond simply financing individual building improvements.

The Code adds another example to that story. The property is new. The improvements are already in place. The owner is using TX-PACE to refinance debt associated with eligible improvements as part of the property's longer-term financing.

It's a reminder that there isn't just one point in a property's lifecycle when TX-PACE can be considered.

A Lender's Perspective

Transactions like The Code also highlight the importance of collaboration among the owner, lender and other project partners. The owner focuses on building a property that performs well and serves its market for the long term.

For the lender, the focus includes structuring financing that works within the property's overall capital needs. TX-PACE brings those considerations together. It provides long-term financing for eligible improvements while allowing the owner to refinance debt already incurred.

"It was an honor to partner with Texas PACE Authority to recapitalize this notable boutique hotel-condo property, which features 176 short- and long-term stay accommodations, in South Austin. By leveraging C-PACE's flexible terms, in this case to recapitalize previously completed energy and water efficiency measures for the building, the sponsor will realize meaningful long-term savings while simplifying their capital stack. This transaction also reinforces C-PACE's ability to fit various transactions and the needs of sophisticated sponsors, whether pre-, mid-, or post-construction." — Sean Ribble, Senior Director of Originations, Nuveen Green Capital

Where TX-PACE Financing Can Fit

The Code is a good reminder that TX-PACE doesn't look exactly the same on every project.  

Sometimes TX-PACE helps finance a renovation or major property improvement. Sometimes it supports a new development. As The Code demonstrates, owners can also use it to refinance debt tied to eligible improvements they have already completed.

For property owners, that flexibility matters. The Code also shows why owners should consider TX-PACE early enough to understand how it may fit into the property's financing. Construction completion does not necessarily end the opportunity.

Looking Ahead

The Code is another example of the range of projects and financing strategies that TX-PACE can support in Texas.

A new property on South Lamar is preparing to open with a significant investment in energy and water efficiency already built into the project. Those improvements are expected to deliver substantial savings over time. TX-PACE is helping the owner refinance debt tied to those eligible investments through a long-term financing structure.

For TPA, that is what makes transactions like The Code worth sharing.  Not because every project uses TX-PACE in the same way, but because each project adds to our understanding of what is possible.  As the TX-PACE market continues to mature, those possibilities continue to grow.

About Texas PACE Authority

Texas PACE Authority (TPA) is a nonprofit organization and the leading administrator of TX-PACE programs in Texas, serving 114 cities and counties across the state at the time this article was published. TPA works with local governments, property owners, and capital providers to facilitate financing for energy and water efficiency, resiliency, and distributed generation improvements in commercial properties.

Through thoughtful program administration, industry collaboration, and market leadership, TPA helps make high-performance building improvements more accessible while supporting the long-term economic and community goals of Texas.

TPA believes that strong programs are built through collaboration. We actively engage with organizations across the PACE, economic development, and high-performance building communities to share knowledge, strengthen industry practices, and help advance opportunities for property owners and communities throughout Texas.

TPA is proud to be affiliated with:

• PACENation – Advancing PACE policy, awareness, and adoption nationwide.
• National Association of PACE Program Administrators (NAPPA) – Bringing together PACE program administrators to promote collaboration and best practices.
• Texas Economic Development Council (TEDC) – Connecting TPA with Texas communities and economic development professionals working to strengthen local economies.
• U.S. Green Building Council – Texas (USGBC Texas) – Engaging with professionals and organizations advancing high-performance, resource-efficient buildings across Texas.