TMG Partners’ $172M Bay Area Loan Sets a Record

300 Lakeside became subject to the largest C-PACE loan on an office property in the U.S. so far. Image courtesy of GreenRock Capital

TMG Partners has secured $172 million in C-PACE financing for 300 Lakeside Drive, a 910,000-square-foot office building in Oakland, Calif. GreenRock Capital provided the loan in conjunction with KeyBanc Capital Markets.

The transaction marks the largest C-PACE loan on a U.S. office property to date. The building was already subject to a $430 million loan from Goldman Sachs, according to CommercialEdge data.

An office tower in Oakland’s CBD

TMG acquired 300 Lakeside in 2020 from Rockpoint Group and The Swig Co. The $449.8 million portfolio transaction also involved Kaiser Center Mall, a 128,700-square-foot office and retail asset located nearby.

Completed in 1961, the office tower rises 29 stories and features 46,541-square-foot floorplates, 17,000 square feet of retail space and a 3.5-acre rooftop garden. The C-PACE financing will provide the necessary funding for various property upgrades such as a complete HVAC overhaul, envelope sealing for energy efficiency, water conservation measures and a complete seismic retrofit.

The LEED Platinum-certified building serves as headquarters for Pacific Gas & Electric Co. The company exercised an initial option to buy the property in 2020, stipulating a price of $892 million; PGE recently amended the offer, moving the closing date to 2025.

The high-rise is some 12 miles from downtown San Francisco within Oakland’s Central Business District. Other tenants at the property include University of California, LiquidSpace and AECOM, CommercialEdge information shows.

C-PACE as a new financing opportunity

Current economic headwinds such as rising interest rates and reduced availability of debt have made C-PACE financing considerably more attractive. GreenRock Capital Managing Principal Chris Robbins stated in prepared remarks that this form of capital is quickly becoming mainstream in commercial real estate markets.

GreenRock Principal Michael Lincoln recently told Commercial Property Executive that retroactive C-PACE financings put lenders in a better situation, as the collateral stays the same but at less exposure, when discussing the growing number of use cases for this type of debt.