By Mansoor Ghori, CEO, Petros PACE
For the CEO of any successful organization, the beginning of a new calendar year is a moment for disciplined reflection on the current state of the business, a look backward to glean what lessons can be learned and pitfalls to avoid repeating, and perhaps most importantly, an opportunity to focus a sharp light on what’s ahead and how best to deliver value to important stakeholders across our ecosystem.
This inaugural blog – the first in a new series of thought pieces that I will pen and share over the course of 2023 – offers a glimpse into our informed perspective as the market leader in C-PACE financing, one of the most dynamic, fastest-growing, and relevant new sectors in structured finance.
So, what happened in 2022? By any measure, 2022 was a breakthrough year for C-PACE financing. Petros led the way, bolstered by the industry’s strongest balance sheet, our robust relationships, our commitment to close, and ability to serve our customers across geographies and industries. We achieved several milestones such as blowing through the $1 billion threshold of directly originated deals and closing the largest deal in C-PACE history, amongst others.
The industry continues to grow and evolve by leaps and bounds and by all respects, C-PACE has come of age. Fueled by strong and persistent ESG tailwinds, improving alignment with traditional lenders, and recognition from larger developers and property owners across the country, C-PACE is now accepted by many of the nation’s largest, most successful and sophisticated commercial real estate owners and institutional lenders as a mainstream financing solution for complex capital stack needs.
As we look ahead into 2023 and beyond, we see a number of conflicting forces at play: the continued momentum of C-PACE financing solutions juxtaposed against the impact of significantly higher borrowing costs, a much tighter credit posture from traditional lenders and fears of a recession that could dampen enthusiasm across a number of development projects across all asset types. In this stressed environment, the reputation and credibility of the industry will be tested; customers will seek quality and safety and we at Petros know that sticking to our commitments, delivering certainty to close, and being a trusted financing solutions partner will never be as important.
In these times, our industry has an opportunity to rise to the occasion and emerge from this period of uncertainty stronger and more integrated into the financing toolkit than ever before. Here’s what we are focused on at Petros:
- Review and playback the lessons learned from past recessionary and high interest rate environments
- Intensely focus on quality, customer service, and discipline
- Actively work to expand C-PACE’s role in the capital stack
- Tirelessly educate the market on the benefits of C-PACE
- And of course, delivering on the commitments made.
With these guiding principles in mind, we are confident we won’t just navigate but we will lead the industry with increased innovation, service, and certainty during these uncertain times. I look forward to sharing industry observations and progress in the months ahead.