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aktree Capital Management has secured $24 million in C-PACE financing to revamp a 48-story office tower it acquired through foreclosure two years ago in Downtown Los Angeles. The investor, based locally, obtained the retroactive Commercial Property Assessed Clean Energy financing for its 914,000-square-foot building at 444 South Flower Street in Bunker Hill. PACE Loan Group provided the clean-energy financing.

    The funds will cover prior sustainability upgrades to the property's systems, including HVAC, plumbing, lighting, and exteriors. C-PACE financing allows building owners to borrow at low rates for efficient energy upgrades by assessing a fixed property tax rate that repays upgrade costs over time.

    Built in 1981, the skyscraper has been featured in TV shows and movies, including "L.A. Law." Anchor tenants include the U.S. Securities and Exchange Commission, Morgan Stanley, Industrious, and law firm Fisher Phillips. Oaktree acquired the tower from Coretrust Capital Partners through a December 2022 foreclosure auction.

    California's C-PACE program enables landlords to finance sustainability improvements retroactively for up to three years after projects are completed. "In a marketplace where ESG continues to be a priority for tenants, it's essential that we lead by example," said Bryan Sather, managing director at Oaktree. "By investing in sustainability, we enhance the tenant experience and secure long-term value."

    This is not the first retroactive C-PACE deal in Southern California; Machine Investment Group and Taconic Capital Advisors secured $90.4 million for two adjacent Hyatt hotels in Hollywood last year, while The Briad Group received $40 million for a newly opened Marriott hotel in San Diego.