BOSTON — Millennium Partners has secured $281 million in private financing for the Millennium Residences at Winthrop Center through Massachusetts’ Property Assessed Clean Energy program, marking the largest commercial PACE financing to date in New England, state officials and the developer announced.
The financing was provided through PACE Massachusetts, a program administered by MassDevelopment in consultation with the Massachusetts Department of Energy Resources. Nuveen Green Capital is serving as the capital provider.
The transaction allows Millennium Partners to recapitalize and extend the financing term for the residential portion of Winthrop Center with permanent, lower-cost financing. The financing will be repaid through a betterment assessment placed on the property.
Located at 115 Federal St. in downtown Boston, the Millennium Residences are part of the 62-story Winthrop Center, a mixed-use development that combines luxury residences, office space, public gathering areas and below-grade parking.
The development includes 317 luxury condominium residences and approximately 800,000 square feet of office space. Its office component is certified under the Passive House standard, which is designed to substantially reduce energy consumption while maintaining indoor comfort.
“Winthrop Center is helping to set the standard for sustainability and energy efficiency,” Boston Mayor Michelle Wu said. “We’re grateful to have a clear proof point that investing in green technologies and efficient building performance goes hand in hand with reducing long-term operating costs, and reaching our climate goals for a healthy, beautiful city.”
State officials said the financing demonstrates how PACE can bring private capital to energy-efficient building projects while reducing the upfront financial burden associated with sustainability investments.
“Through PACE Massachusetts, we’re bringing private investment to the table to support major developments and make our buildings cleaner and more efficient,” Gov. Maura Healey said.
PACE Massachusetts allows eligible commercial property owners to finance energy efficiency and renewable energy investments through a betterment assessment rather than traditional financing. The program can provide financing terms of up to 20 years and can be used for improvements including solar panels, heat pumps, geothermal systems, energy-efficient lighting and insulation.
Massachusetts communities must opt into the program for properties within their borders to qualify. Boston is among 89 cities and towns that have opted in.
The state updated its PACE Massachusetts guidelines for new construction projects in June, with the changes intended to streamline applications, expand eligible costs and better align financing levels with local building energy codes.
Nuveen Green Capital Senior Director of Originations Mike Doty said the Winthrop Center transaction demonstrates how commercial PACE financing can provide long-term capital after a project is completed.
“Through C-PACE’s accretive financing structure, Millennium Partners was able to recapitalize this project post-completion with secure long-term, low-cost, fixed-rate capital, effectively injecting liquidity back into the property,” Doty said.
Millennium Partners Founder Christopher M. Jeffries said the financing recognizes the company’s investment in energy efficiency while providing long-term capital for the development.
“Winthrop Center is a reflection of that commitment, and this financing through the PACE Massachusetts program recognizes the investments we have made in energy efficiency while providing long-term capital that supports the building’s enduring performance,” Jeffries said.
Winthrop Center has received LEED Platinum and WELL Gold certifications. The development’s office building is billed as the world’s largest Passive House-certified office building, while Millennium Partners says the property is expected to use 65% less energy than comparable non-energy-efficient buildings in the region.
The project also includes The Connector, a multilevel public gathering space serving residents, office workers and visitors.
MassDevelopment President and CEO Navjeet Bal said the transaction represents an opportunity for other Massachusetts property owners and developers to consider PACE financing for energy and efficiency investments.
“This financing tool can help them advance clean energy investments, lower building emissions, and save money,” Bal said.
The $281 million financing adds to Winthrop Center’s position as a prominent example of large-scale sustainable development in Boston while providing Millennium Partners with long-term capital for the residential component of the project.
