PACE Loan Group and Nuveen Green Capital finance $140 million in data-center C-PACE loans

PACE Loan Group originated a $100 million C-PACE loan through Missouri's Show Me PACE program for Patmos Hosting's AI data center campus in Kansas City, Mo. The financing will fund equipment, HVAC and plumbing supporting the cooling and electrical load of a 421,112-square-foot, 35-megawatt facility in the former Kansas City Star building. Commercial Observer reports it was the largest C-PACE deal in Missouri history and one of the first C-PACE loans in the country for a data center.

The lender says many conversion costs were eligible and the loan's long duration matched the sponsor's business plan, according to Commercial Observer. Eligible improvements include energy and water efficiency, renewable-energy systems and resilience improvements.

A separate $40 million C-PACE financing through Texas' Lone Star PACE program is 24 percent loan-to-value on a 774,000-square-foot data center conversion at ViVa Center in Houston. Nuveen Green Capital supplied the capital for energy-efficient windows, LED lighting, advanced HVAC systems and high-efficiency plumbing. ViVa Center is within a 2.3 million-square-foot technology hub on the former Compaq and Hewlett-Packard Enterprise campus.

The International Energy Agency estimates data centers consumed about 415 terawatt hours of electricity globally in 2024. It projects that will more than double to roughly 945 terawatt hours by 2030, with artificial intelligence the most important driver. Cooling and other infrastructure is projected to account for about 20 percent of the net increase in global data center electricity consumption through 2030.

In the $172.5 million Shoma Bay construction financing this publication covered in September, C-PACE stood alone, with no bank debt underneath it. In Houston the assessment covers roughly a quarter of value; the report did not specify the remaining 76 percent.

C-PACE is repaid through the property tax bill, typically over 10 to 20 years, and the assessment generally remains with the property if it is sold. Programs and eligibility requirements vary by jurisdiction. Lone Star PACE is one such program; this publication reported in August it was closing $64.8 million across six Texas projects, including a data center. Nuveen Green Capital's fourth C-PACE fund pushed the firm's cumulative commitments past $3 billion, this publication reported in August.