Las Vegas' Rio Hotel & Casino closes $176M CPACE loan for renovations

Peachtree Group has closed a $176.5 million retroactive Commercial Property Assessed Clean Energy (CPACE) loan for Dreamscape Companies' Rio Hotel & Casino in Las Vegas, the largest credit transaction in its history and one of the biggest CPACE financings completed in the US.

The transaction was finalized in less than 60 days, according to Peachtree. The CPACE loan provided retroactive financing for completed work at the property, enabling Dreamscape to pay down senior debt.

Retroactive CPACE funding allows 100% of proceeds to be reimbursed for project costs that have already been completed. CPACE loans allow commercial property owners to fund upgrades that improve energy efficiency, water conservation, and more.

“This deal highlights an inflection point for CPACE, with some of the nation’s largest financial institutions consenting to its use because they see the clear benefit to the capital stack,” said Jared Schlosser, head of originations and CPACE for Peachtree. “By closing quickly on a marquee hospitality asset, we were able to strengthen the position of both the owner and its lenders.”

The Rio, now under the Destinations by Hyatt brand, completed a $350 million renovation in 2024. The project covered its 2,520 guest rooms, a 150,000-square-foot casino floor, and 220,000 square feet of meeting and convention space, along with pools and other amenities.

Specific upgrades included: a full transformation of the Ipanema Tower suites, remodeling of 1,400 rooms, renovations to the convention center, a reimagined casino floor, modernization of the central heating and cooling plant, electrical infrastructure upgrades, new exterior paint and LED neon lights, installation of an OLED marquee on Flamingo Road, addition of the six-stall Canteen Food Hall.

The resort features two hotel towers, Ipanema and Masquerade, connected by a casino, restaurants, and retail outlets.

“We see tremendous opportunity ahead for retroactive CPACE and its use in funding new commercial real estate development,” Schlosser said. “It’s an attractive alternative to more expensive forms of capital.”

Peachtree CEO and managing principal Greg Friedman said the transaction represented a historic milestone for the company and served as a testament to the ecosystem it has developed over the past 18 years.

"Through our vertically integrated platform, deep expertise, and disciplined approach, we have developed the infrastructure to be a leader in the private credit space,” said Friedman. “Our ability to deliver speed, creativity, and certainty of execution positions us to provide capital solutions that create value for our investors and partners across market cycles.”

According to the C-PACE Alliance, the CPACE market has surpassed $10 billion in cumulative US originations in just over a decade. Peachtree has originated more than $1.5 billion in CPACE transactions, in addition to bridge, mezzanine, and construction lending.